The Luxembourg Administration of Direct Tax has announced the publication of Circular L.I.R. n° 164/1 of 29 January 2025, which outlines the rules for determining interest rates on debit current accounts held by associates or shareholders of entities subject to corporate income tax. The Circular differentiates between cases where an associate/shareholder is a natural person and where an associate/shareholder is a related company. Where an associate/shareholder is a natural person, the arm's length principle should be followed. However, a simplified approach is allowed using the annual interest rate applicable to consumer credit. This can be determined by referencing the average...