On July 1st 2015, the draft law n°6798, the aim of which is to approve and ratify the FATCA intergovernmental agreement (“IGA”) signed on March 28th 2014 (please refer to our Newsletter of March 2014) between Luxembourg and the United States of America, and the exchange of notes dated March 31st and April 1st 2015 has been approved by the Parliament ("the Law"). According to Article 10 of the IGA, the entry into force of the IGA is conditional upon the completion of
- the internal procedures for entry into force by Luxembourg and
- the ratification by the United States of the 2009 Protocol relating to the double tax convention concluded between Luxembourg and the United States,
both with subsequent notification through diplomatic channels.
With the Law, Luxembourg complies with its obligations so that the IGA may enter into force by September 30th 2015, the date on which the first data needs to be exchanged between Luxembourg and the U.S. competent authorities.
According to Article 2 paragraph 4 of the Law, Luxembourg reporting institutions have to provide the reportable information to the Luxembourg Tax Authorities (Administration des Contributions Directes), which have been nominated as the competent authorities for the application of FATCA in Luxembourg, no later than June 30th of the year following the year to which the reportable information relates.
However, the Luxembourg Tax Authorities confirmed on May 29th 2015 that the first deadline for the FATCA reporting is exceptionally extended to July 31st 2015, based on §83 (1) of the General Tax Law (Abgabenordnung). With the Law, Luxembourg adopted the legal provision obliging a reporting Luxembourg financial institution to provide the reportable information to the Luxembourg Tax Authorities on that date.
For the time being, it is not foreseeable if the United States of America will ratify the 2009 Protocol relating to the double tax convention by September 30th 2015, which remains a condition for the entry into force of the IGA. Based on Article 3 (10) IGA, the Agreement shall terminate on September 30th 2015 if the requirements for an entry into force have not been fulfilled.