The Commission has formally asked Luxembourg to abolish the discriminatory tax regime applied to taxpayers who reinvest property income abroad, meaning outside Luxembourg but within the EU/EEA.
Capital gains resulting from the sale of property which are reinvested abroad are taxable immediately, whereas the same capital gains, if reinvested in property in Luxembourg, benefit from a temporary tax deferral. This arrangement applies to natural persons who own property in Luxembourg regardless of whether they are resident in Luxembourg or in another EU/EEA country. This constitutes an unjustified restriction on the free movement of services and free movement of capital.
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