A CFC is a foreign entity or foreign permanent establishment, the income of which is not taxable or is exempt in Luxembourg.    In the case of a foreign entity, there must be a Luxembourg resident (either alone or with associated enterprises) that directly or indirectly holds more that 50% of the voting rights or capital, or is entitled to more that 50% of the profits.    In addition, the income tax paid by the foreign entity or foreign permanent establishment must be lower than the difference between the income tax it would have paid on those profits if it were subject to tax in Luxembourg and the income tax paid by the foreign entity or foreign permanent establishment