Common reporting standard

On 14 August 2015, bill of law 6858 (the “Bill”) concerning the automatic exchange of financial account information in the field of taxation was submitted to the Luxembourg Parliament.  

The Bill aims inter alia at implementing Directive 2014/107/EU (1) (the “EU CRS Directive”).

The EU CRS Directive aligns the European legislation on automatic exchange of information with the Common Reporting Standard for the automatic exchange of tax information (“CRS”), developed by the OECD, which draws in many aspects of FATCA and which is sometimes referred to as Euro FATCA.

In this respect, the EU CRS Directive extends the scope of the automatic exchange of information for tax purposes among EU Member States to interest, dividends, account balances and sales proceeds from financial assets by way of amendment of the Directive 2011/16/EU on administrative cooperation in the field of direct taxation.

It is expected that the EU CRS Directive will repeal and supersede Directive 2003/48/EC as amended, which already provides for the automatic exchange of information on savings income in the form of interest payments, as of 1 January 2016.

The Bill should be applicable as from 1 January 2016. Luxembourg, as an “early adopter”, will implement the exchange of information for the first time in 2017 for information relating to the year 2016.

(1) Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation.