Luxembourg: NACE code assigned investment funds upheld (Administrative Court of Appeal decision)

An Administrative Court of Appeal decision concerning the NACE code assigned to investment funds

NACE code assigned investment funds upheld

The Administrative Court of Appeal on 5 March 2024 held in three cases (n°49365C, 49366C, and 49367C) that the statistical classification of economic activities in the European Community (NACE code) attributed to the taxpayer by the National Institute of Statistics and Economic Studies of the Grand Duchy of Luxembourg (STATEC)—which is relevant in determining the taxpayers’ required annual contribution to the Chamber of Commerce—was appropriate. 


The taxpayers were two alternative investment funds (AIF) in the legal form of a société en commandite simple (SCS) and one investment fund in the legal form of a société en commandite spéciale (SCSp). The taxpayers contested the NACE code assigned by STATEC, which was “Other collective investment undertakings” (Autres organismes de placement collectif) under the NACE code 64.309 and argued that they should fall under the category of “Financial holding companies” (Sociétés de participations financières (SOPARFI)) under the NACE code 64.202.

STATEC rejected the taxpayer’s argument on the grounds that any funds that do not take the form of investment companies with variable capital (SICAV), investment companies with fixed capital (SICAF), investment companies in risk capital (SICAR), or mutual funds (FCP), whether regulated or not, fall under the category 64.309. STATEC also stated that the mere holding of financial assets on the balance sheet's assets side would not be sufficient to be classified as a SOPARFI. It would also be necessary (among other requirements) that the majority of the holdings be held at over 50% and belong to a clearly defined group of companies, which was not true in the taxpayers’ case.

The taxpayers challenged STATEC’s decision before the Tribunal, which ruled in favor of STATEC, and the taxpayers appealed to Administrative Court of Appeal, which also denied the taxpayers’ challenge. The taxpayers’ primary arguments before the court were based on the notion that their activities did not constitute commercial activities and thus their income did not constitute commercial income on which the annual contribution to the Chamber of Commerce generally is imposed. The court noted, however, that the issue before the court was the correctness of the taxpayers’ assigned NACE code, not whether the taxpayers’ income was subject to assessment by the Chamber of Commerce. The court thus rejected all of the taxpayers’ arguments.

Read a May 2024 report prepared by the KPMG member firm in Luxembourg 


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