Christophe Hillion – Partner, Transfer Pricing, PwC Luxembourg, Dmytro Fomenko – Director, Transfer Pricing, PwC Luxembourg, Baptiste Guionnet – Partner, Advisory, PwC Luxembourg & Anne Massardier – Senior Manager, Advisory, PwC Luxembourg. (Photo: PwC Luxembourg)

Christophe Hillion – Partner, Transfer Pricing, PwC Luxembourg, Dmytro Fomenko – Director, Transfer Pricing, PwC Luxembourg, Baptiste Guionnet – Partner, Advisory, PwC Luxembourg & Anne Massardier – Senior Manager, Advisory, PwC Luxembourg. (Photo: PwC Luxembourg)

PwC experts discuss changes in the Luxembourg investment tax credits regime and its impacts on multinational corporations. PwC highlights the importance of integrating technology and data management to enhance tax and transfer pricing compliance to lead to strategic decision-making.

The new Luxembourg investment tax credits regime, approved in December 2023, offers a unique opportunity for Multinational Corporations (MNCs) to optimise their tax position and enhance their operational efficiency. Here we offer an executive summary of a more where we explore how MNCs can leverage three key aspects: operational transfer pricing, technology, and data management to benefit from this new regime and transform their tax and business models.

Operational transfer pricing can help MNCs align their tax and business strategies to reflect the value creation as well as the substance of their operations. By reviewing and improving their transfer pricing models, MNCs can reduce their tax risks and support their transformation projects.

TP automation – What do companies seek? PwC Luxembourg

TP automation – What do companies seek? PwC Luxembourg

Technology enables MNCs to automate and streamline their tax processes, improve their tax reporting and analyses. Technology can also facilitate the communication and collaboration between the tax and the business functions while providing more transparency and visibility on the tax implications of the business decisions. MNCs need to leverage the available digital tools and solutions, such as data analytics, artificial intelligence, cloud computing, and blockchain, to enhance their tax function and optimise their tax performance.

Data management is particularly critical for MNCs in the context of the investment tax credits regime. MNCs should ensure that they have reliable and consistent data sources and that they can track and document their eligible investments and expenses. MNCs should also adopt a proactive approach to data governance, and establish clear roles and responsibilities, policies and procedures, and controls and standards for their data management.

The new Luxembourg investment tax credits regime is a valuable opportunity for MNCs to rethink and reshape their tax and business models to gain a competitive edge in the market. Operational transfer pricing, technology, and data management are key enablers for MNCs to achieve these goals, and PwC can assist them with their transformation journey.

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 – Partner, Transfer Pricing, PwC Luxembourg

 – Director, Transfer Pricing, PwC Luxembourg

 – Partner, Advisory, PwC Luxembourg

– Senior Manager, Advisory, PwC Luxembourg