FATCA And CRS Alert Issue 2016-06 / Luxembourg Tax Alert 2016-10

Luxembourg tax authorities issue FAQ on CRS implementation

The Luxembourg tax authorities have recently published the answers to frequently asked questions (FAQ) on the implementation of the Common Reporting Standard (CRS): read them here (publication date 28 April 2016, only French version).

The key information from the FAQ can be summarized as follows:

General Provisions

1. The FAQ starts by giving a list of references to national as well as international legal documents and publications:

Luxembourg law on the implementation of the CRS framework (« Luxembourg CRS law ») (Loi du 18 décembre 2015 relative à la Norme commune de déclaration (NCD) Grand-Ducal Decree implementing article 2, paragraphe 4 of the Luxembourg law on the implementation of the CRS framework (Règlement grand-ducal du 15 mars 2016) FAQ published by the Luxembourg tax authorities (FAQ-NCD de l'Administration des contributions directes (ACD)) Publications of the OECD: Standard for Automatic Exchange of Financial Account Information in Tax Matters Standard for automatic exchange of financial information in tax matters: Implementation Handbook CRS-related FAQs b) Furthermore, the FAQ confirms that the list of Reportable Jurisdictions to be reported to in calendar year 2017 will be issued by the Luxembourg tax authorities in due time on the website of the Luxembourg tax authorities.

Additionally, the FAQ confirms that in principle the following jurisdictions quality as Reportable Jurisdictions in 2017:

The European Union Member States The jurisdictions that have signed the Multilateral Competent Authorities Agreement (MCAA) regarding the automatic exchange of information on financial accounts and with whom Luxembourg has agreed to exchange information in tax matters. It should be noted that some Participating Jurisdictions will give information but will not receive any (absence of reciprocity). The obligation to exchange information with respect to one calendar year only applies if the agreement between the two jurisdictions is ratified and effective and the jurisdictions have the relevant legal framework in place. c) The FAQ confirms that the list of Participating Jurisdictions has been published by Grand-Ducal Decree and will be updated in due time. It is important to note that the definition of "Participating Jurisdiction" is a key factor in assessing whether a look-through approach has to be applied on certain Investment Entities that are resident in a jurisdiction that is not a Participating Jurisdiction.

It should also be noted that the United States of America is considered a Participating Jurisdiction and is included in the list of the Grand-Ducal Decree because of the information exchange under the existing FATCA (Foreign Account Tax Compliance Act) IGA.

d) The Luxembourg tax...