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22 April 2020 / article

The impact of the COVID-19 crisis: corporate tax residence and substance

On 3 April 2020, the OECD Secretariat issued its analysis on tax treaties and the impact of the COVID-19 crisis. The guidance deals with (a) concerns related to the corporate residence status (place of effective management); (b) concerns related to the creation of Permanent Establishments; (c) concerns related to cross-border workers, and (d) concerns related to the residence status of individuals. In this special edition we focus on the issue of corporate tax residence and substance.

The COVID-19 crisis may raise concerns about a potential change in the “place of effective management” of a company as a result of a relocation, or inability to travel, of chief executive officers or other senior executives. Such change may impact the company’s residence status under the relevant domestic laws and also affect the country where a company is regarded as a resident for tax treaty purposes. In addition, it may impact the application of anti-abuse rules and beneficial ownership. Below we deal with the OECD analysis as well as the perspective of our L&L home markets – Belgium, Luxembourg, Netherlands and Switzerland – on corporate tax residence and substance.

Overview of COVID-19 tax emergency measures

See here for an overview of the most important announced COVID-19 tax emergency measures adopted by the European Commission as well as within our home countries Luxembourg, Belgium, Switzerland and the Netherlands. 



Important Dutch tax developments

There are a couple of important Dutch tax developments in the investment management area to take into consideration. read more

Switzerland | COVID-19: Taxation of cross-border workers

The COVID-19 pandemic has led to a large number of employees being unable to physically perform their work in their country of employment. read more
COVID-19 measure: two royal decrees concerning partial exemption from payment of payroll taxes

COVID-19 measure: two royal decrees concerning partial exemption from payment of payroll taxes

Following the Bill dated 15 July 2020 (Belgian official Gazette of 23 July 2020), the new system of (partial) exemption from payment of withheld payroll taxes... read more