Executive summaryOn 25 March 2022, the Luxembourg Tax Authority updated the Circular originally issued on 8 January 2021 and thereby clarified1 certain technical aspects of the interest limitation rules introduced in the Luxembourg legislation by law in 2018 (the Law). The Law implements the European Union (EU) Anti-Tax Avoidance Directive 2016/1164 (2016) (ATAD).2 These rules limit the deductibility of taxpayers’ borrowing costs to the higher of 30% of tax EBITDA (Earnings (taxable profits) before Interest, Tax, Impairments, Depreciation and Amortization) or €3 million.The updated Circular first confirms that a loan contracted before 17 June 2016 that is modified in order to reflect the end...