Lawyer's professional secrecy and exchange of information on request

On 4 May 2023, the Administrative Court of Luxembourg ("Court") had to rule on the application of professional secrecy of lawyers to requests for exchange of information (cf. see cases with docket numbers: 48677C and 48684C and 48678C and 48685C).


Following a request for exchange of information from the Spanish tax authorities (based on the DTT Luxembourg-Spain and Directive 2011/16/EU ("DAC") ), the Luxembourg tax authorities ("LTA") subsequently issued an injunction against a Luxembourg law firm to communicate information about one of its clients (i.e. a Spanish resident company).

The Luxembourg law firm refused to provide this information in light of:

  • §177, paragraph (1), AO (Abgabenordnung dated 22 May 1931), which establishes in its paragraph (i) the principle of enforceability of professional secrecy of lawyers against the LTA. There is one exception to this principle in its paragraph (2) for facts that have been revealed to a lawyer by his/her client in connection with an advisory or representation activity in tax matters. On this point, the Luxembourg law firm clarified that its legal mandate was exclusively of a non-tax nature and concerned only company law. The possibility of applying this provision of domestic law would be possible on the basis of Article 27, paragraph (3), of the DTT Luxembourg-Spain and Article 17 (4) of DAC, which recognises the right to refuse a request for an exchange of information that is covered by professional secrecy; and
  • Article 7 of the Charter of Fundamental Rights of the EU ("Charter") insofar as this would constitute an unjustified interference with the right to respect for communications between lawyers and their clients.

Questions for a preliminary ruling

The Court, noted on the one hand that Article 17 (4) of Directive 2011/16 does not further define the professional secrecy that would justify that the competent authority of the requested Member State refuses to exchange the information and on the other hand, that the CJEU has not yet had the opportunity to determine the scope of Article 7 of the Charter in relation to the professional secrecy of lawyers with regard to the exchange of information on request. Therefore, the Court has decided to refer to the European Court of Justice ("CJEU") one of the following questions for a preliminary ruling:

  • Does a legal consultation with a lawyer in the field of company law – in this case with a view to setting up a corporate investment structure – fall within the scope of the enhanced protection of exchanges between a lawyer and his/her client guaranteed by Article 7 of the Charter?
  • If the first question is answered in the affirmative, does the competent authority of a requested Member State ordering a lawyer to provide it roughly with all the available documentation relating to his/her relationship with his/her client, a detailed description of the transactions in the scope of his/her advice, an explanation of his/her involvement and the identification of his/her interlocutors, entail an interference with the right to respect for communications between lawyers and their clients, guaranteed in Article 7 of the Charter?

Interestingly, the CJEU already ruled last year on a similar issue with respect to mandatory automatic exchanges of information in the field of taxation in relation to reportable cross-border arrangements ("DAC6"). According to the CJEU, the obligation imposed on lawyers under DAC6 to notify intermediaries other than their own clients, infringes the right to respect for communications between lawyers and their clients guaranteed by Article 7 of the Charter. See our Newsflash dated 20 December 2022 for more details on this case.