Luxembourg

Luxembourg company law permits companies to buy back their shares providing certain requirements are met. One requirement is that the redemption should not cause the company's net assets to fall below its subscribed share capital. Companies undertaking redemption should plan carefully to minimize tax consequences. Tax law treats a purchase of all the shares held by one body as a partial liquidation. There will be no withholding tax charge and capital gains tax liability will be minimal or subject to exemption in this case. Tax treatment also varies according to whether or not the shareholder is an individual.