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Equipe - secteur financier

ATAD III : New Measures to Combat Tax Evasion in Luxembourg

Directive ATAD III

The European Union's third Anti-Tax Avoidance Directive, known as ATAD III, aims to strengthen the fight against tax evasion by specifically targeting shell companies and other entities without real economic substance. Luxembourg, often highlighted for its favorable tax regimes, is at the center of these reforms. This article explores the impact of ATAD III in Luxembourg, its advantages and disadvantages, and examines the crucial role played by accounting and tax consulting firms, particularly AR Services S.A., in this new regulatory landscape.


1. Introduction to ATAD III


Effective from 2024, the ATAD III aims to combat the misuse of shell companies for undue tax advantages. It introduces stringent criteria regarding the economic substance of entities, which will have a profound impact on business structuring in Luxembourg.


2. Implications for Luxembourg


Known for its favorable tax environment, Luxembourg must adapt to these new rules that could alter its attractiveness as a preferred jurisdiction for certain investment structures. Here is a concise analysis of the advantages and disadvantages presented by this directive:



  • Enhanced International Credibility: ATAD III will help Luxembourg strengthen its image as a financial center committed to combating tax evasion.

  • Promotion of the Local Economy: By requiring substantial economic presence, the directive will encourage direct investments and job creation.



  • Impact on Tax Attractiveness: The new requirements could deter some companies from establishing in Luxembourg if they cannot meet the economic substance criteria.

  • Increased Operational Costs: Businesses may need to increase their investment in local substance, which could lead to higher operational costs.


3. The Role of AR Services S.A.


As a leading financial services company, AR Services S.A. is ideally positioned to assist your business through these regulatory changes. Here is how we can help:

  • Compliance Advisory: Our accountants and tax experts are at your disposal to assess your current situation and recommend optimal compliance strategies.

  • Management of Economic Substance: We offer comprehensive services to help your business strengthen its presence in Luxembourg, including managing qualified staff, offices, and necessary administrative activities.

  • Restructuring and Tax Optimization: We will advise you on the best practices to restructure your activities while maximizing tax benefits within the current legal framework.


4. Conclusion


The implementation of ATAD III is a significant step towards greater tax transparency and a more robust economy in Luxembourg. AR Services S.A. is committed to providing you with the expertise needed to navigate this new regulatory landscape with confidence and efficiency.


For more information or to schedule a consultation, do not hesitate to contact us.

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