The Luxembourg Administration of Direct Tax (Administration des Contributions Directes) has published Circular L.I.R. n° 168quater/1 of 9 June 2023, which provides guidance on the taxation of reverse hybrid entities under Article 168quater of the Luxembourg Income Tax Law. Key points include: The taxable income of a reverse hybrid would principally be determined under the cash accounting method, meaning that the entity would not be subject to tax in Luxembourg absent the actual receipt of income. Concurrently, no step-up in basis would be available when the entity becomes a reverse hybrid, and also no tax consequences would arise when the...