Under Luxembourg tax law, a CFC is a foreign entity or permanent establishment (PE) whose profits are not subject to tax or are exempt in Luxembourg, in which a Luxembourg taxpayer, alone or together with associated enterprises, holds directly or indirectly more than 50% of the voting rights, capital ownership, or entitlement to profits of the entity (control test), and whose income is subject to an effective tax rate that is less than 50% of the Luxembourg tax that would have been due on the same income (low-taxation condition). Pursuant to Article 164ter of the Luxembourg Income Tax Law (LITL), the non-distributed income of the CFC that arises from non-genuine arrangements put in place essentially to obtain a tax advantage is attributed to the Luxembourg controlling taxpayer.