EDITORIAL

Greetings,

Even if the health crisis is not yet behind us, social and economic life is restarting after the unprecedent lockdown we all encountered.

In this context, many measures have been introduced by the Luxembourg government to support families and businesses. One of the latest was passed by the Parliament on 22 July 2020. It aims to introduce a 6-month deadline extension for reporting under the mandatory disclosure regime applicable to tax intermediaries and a 3-month deadline extension for reporting under both the Common Reporting Standards ("CRS") and the Foreign Account Tax Compliance Act ("FATCA"). We detail the new deadlines for reporting.

The Luxembourg legislation governing CRS and FATCA in Luxembourg was also amended -non-related to the COVID crisis as regards rules on exchange of information with effect as of 1 January 2021. We also describe these changes.

On 8 June 2020, a draft law to implement the Directive modifying the VAT rules on cross-border B2C sales was submitted to the parliament. The new rules will considerably modify the compliance obligations applicable to businesses involved in e-commerce. We consider the implications of these new rules.

At the level of the European Court of Justice ("CJEU"), the CJEU recently ruled on the Luxembourg tax consolidation regime and took a very positive decision for Luxembourg corporate taxpayers. We analyse this decision and its consequences for the Luxembourg taxpayers.

On 2 July 2020, the CJEU also took a decision in the so-called Blackrock case that could have a significant impact on the VAT position of fund managers. We analyse this decision and its potential impacts.

On the same date, Advocate General Juliane Kokott also gave an interesting opinion on questions referred by the Administrative Court of Luxembourg in relation to the Luxembourg rules on exchange of information upon request and their compatibility with EU law. We outline the reasoning of the Advocate General.

From a legal point of view, on 12 December 2019, a European Directive amending the rules as regards cross-border conversions, mergers and divisions was published. The Directive entered into force on 1 January 2020 and Member States are now required to bring their national law in line with the Directive by 31 January 2023. We describe the new rules introduced at European level.

COVID-19: Luxembourg extends deadlines for DAC6, CRS and FATCA reporting

Our Insights At A Glance

  • On 22 July 2020, the draft law which implements the optional deadline extensions of EU Directive of 24 June 2020 amending the EU Directive on Administrative Cooperation to address the urgent need to defer certain time limits for the filing and exchange of information in the field of taxation because of the COVID-19 pandemic was passed by the Parliament.
  • The draft law introduces mainly a 6-month deadline extension for reporting under the mandatory disclosure regime applicable to tax intermediaries ("DAC6") and a 3-month deadline extension for reporting under both the Common Reporting Standards ("CRS") and the Foreign Account Tax Compliance Act ("FATCA").
  • As soon as the legislative procedure related to the draft law will be finalised, the DAC6, CRS and FATCA deadline extensions will enter into force retroactively on 30 June 2020.
  • No penalties for late reporting under the aforementioned reporting frameworks will apply in the meantime.

On 22 July 2020, the draft law implementing the optional deadline extensions of EU Directive of 24 June 2020 (the "Directive") amending the EU Directive on Administrative Cooperation to address the urgent need to defer certain time limits for the filing and exchange of information in the field of taxation because of the COVID-19 pandemic was passed by the Parliament. The draft law introduces mainly a 6-month deadline extension for reporting under the mandatory disclosure regime applicable to tax intermediaries ("DAC6") and a 3-month deadline extension for reporting under both the Common Reporting Standards ("CRS") and the Foreign Account Tax Compliance Act ("FATCA").

New DAC6 deadlines

The draft law implements the optional 6-month deadline extensions of the Directive for reporting and exchanging information under DAC6 and amends the law of 25 March 2020 implementing DAC6 accordingly. As a result, the following reporting and exchange of information deadlines will apply:

' The 30-day reporting period applicable to reportable cross-border arrangements made available for implementation, ready for implementation, or where the first step in their implementation has been made between 1 July 2020 and 31 December 2020 shall begin on 1 January 2021.

' The first quarterly reporting of marketable arrangements shall be performed by 30 April 2021.

' The 10-day deadline applicable to the notification to be made by intermediaries subject to professional secrecy in respect of reportable cross-border arrangements made available for implementation, ready for implementation, or where the first step in their implementation has been made between 1 July 2020 and 31 December 2020 shall begin on 1 January 2021.

' Reportable arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 have to be reported by 28 February 2021.

' The first automatic exchange of information will have to be performed by the Luxembourg tax authorities by 30 April 2021 at the latest.

New CRS deadlines

The draft law implements the optional 3-month deadline extension of the Directive for exchanging information related to calendar year 2019 and introduces a 3-month deadline extension for reporting under CRS. The law of 18 December 2015 implementing CRS is amended accordingly.

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