A new Circular ‘LIR n°14/4 of 9 January 2015’ confirms that the SCS (Société en commandite simple) and the SCSp (Société en commandite spéciale) are transparent for corporate income tax purposes as well as for municipal business tax purposes if (i) they are not tainted by a commercial general partner holding at least a 5% interest in the entity and (ii) the SCS or SCSp do not exercise a commercial activity.
The Circular further clarifies the concept of “commercial activity” especially for fund structures and confirms that Luxembourg Alternative Investment Funds (within the meaning of Directive 2011/61/EU) as SCS or SCSp are deemed not to exercise such a commercial activity.