One of our client transferred its statutory and management seat from the BVI to Luxembourg in 2019.
At the time, he was in the BVI he took a provision on an asset.
End of 2020, he released that provision as it was not economically justified anymore.
When preparing the 2020 corporate tax returns of that Luxembourg company, we considered the release of the provision as non-taxable.
Indeed based on past Luxembourg court case, when a provision could not create a tax deductible item in Luxembourg, its release is not taxable.
