With draft law N° 6858 (the “Draft Law”), which was submitted to Parliament on August 14th 2015, Luxembourg aims at enhancing its commitment with regard to international exchange of information. The goal of the Draft Law is to implement Directive 2014/107/EU which significantly enlarges the scope of Council Directive 2011/16/EU on administrative cooperation in the field of taxation, which has been implemented by the laws dated March 29th 2013 (the “2013 Law”) and March 26th 2014.
If adopted, any Luxembourg reporting financial institution, as defined in Annex I and II of the Draft Law, will be required to provide to the Luxembourg Tax Authorities (Administration des Contributions Directes, “ACD”) the same information as foreseen in Art. 2 N°2 of the FATCA intergovernmental agreement concluded between the United States and Luxembourg. This includes notably the name, address, birth date and birthplace of the account holder and its taxpayer identification number, the account number, name and ID of the Reporting Luxembourg Financial Institution, the account balance or value, the total gross amount of interest, dividend, other income generated with respect to the assets held in the account,and the total gross proceeds from the sale or redemption of property paid or credited to the account.
In addition, the Draft Law also aims at implementing the multilateral competent authority agreement (“MCAA”), which Luxembourg signed on October 29th 2014 in Berlin, in order to automatically exchange information based on Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and promoting the automatic exchange of information as the global new standard and going hand in hand with the common reporting standard (“CRS”) developed by the OECD.
The information regarding the reportable accounts are to be provided by the Luxembourg reporting financial institution to the ACD by June 30th of the year following the year to which the information relates, and subsequently exchanged by the ACD by September 30th following the year to which the information relates, for the first time in September 2017 regarding fiscal year 2016.
Information will be exchanged automatically with all Member States of the European Union (on the basis of Council Directive 2014/107/EU), and with all other jurisdictions (i) having entered the MCAA and (ii) having implemented adequate national legislation allowing the exchange of information under the MCAA.