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Navigating Luxembourg VAT in US Fund Managers’ Luxembourg Private Fund Structures

  • Luxembourg private funds are designated as alternative investment funds (AIFs) and usually take the form of a special limited partnership with a limited liability company as the general partner
  • Luxembourg VAT (currently 17%) is generally due on fees for services provided by service providers to the fund structure
  • VAT may be applicable for services rendered to AIFs unless an exemption applies, such as for specific and essential management services
  • Organizational expenses and fund expenses incurred by the AIF are typically designated in the limited partnership agreement, with fund expenses usually borne by the AIF
  • Thorough VAT analysis of fund documentation is required when setting up a Luxembourg AIF structure to manage any VAT leakage and allocate it between the AIF and the US fund sponsors

Source: loyensloeff.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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