2015 Tax Changes

Law of 25 November 2014 on the procedure applicable to the exchange of tax information upon request

The law applies to information requested by another State under a bilateral agreement, relevant European Directives as implemented in Luxembourg or the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and amends the Law dated 31 March 2010 governing the matter. The purpose of the law is primarily to ensure a more effective exchange of information (including banking information) and to address critics made in this respect at the level of the Global Forum on Transparency and Exchange of Information for Tax purposes.

The first main impact of the law is that the Luxembourg tax administration will have a more passive role than in the past. Pursuant to the new procedure, the tax administration will now only check the formal validity of an information request. Furthermore, if so requested by the foreign State, the Luxembourg tax administration will now forbid the holder of information to inform the taxpayer about the request.

In addition, no legal action will be available anymore in Luxembourg against the Luxembourg tax administration's order to provide information requested. Under the previous procedure, the exercise of a then available legal action led to a significant number of case law concluding that the information request was - at least in part - not valid, e.g. because the information requested did not appear to be "foreseeably relevant".

The law applies to information requests handled by the Luxembourg tax administration as from 1 December 2014.

Law of 25 November 2014 amending the laws of 21 June 2005 implementing Directive 2003/48/EC and related bilateral agreement and the law dated 23 December 2005 introducing a withholding tax on certain income from savings.

The law implements the official announcement made in April 2013, whereby Luxembourg is switching to the automatic exchange of information under Directive 2003/48/EC (so-called Savings Directive). As a result, Luxembourg paying agents will now automatically report information on interest and similar income paid to an individual or a residual entity (for the benefit of such individual) resident or established in another EU Member State or certain dependent territories. The reporting is to be made to Luxembourg authorities which will in turn exchange the information with the relevant foreign jurisdictions.

The law applies to interest and similar income paid...