On March 13, 2017, Luxembourg published updated FAQs on the OECD Common Reporting Standard (CRS). Luxembourg published prior FAQs on April 21, 2016.
In general, jurisdictions subject to declaration in Luxembourg are (i) EU member states and (ii) signatories of the OECD Multilateral Competent Authority Agreement (MCAA), implementing the G20’s and OECD’s Standard for the Automatic Exchange of Financial Information in Tax Matters (Luxembourg signed this agreement on October 29, 2014) and for which Luxembourg is required to provide information. The obligation to exchange information for a calendar year applies only if the MCAA has entered into force between the two competent authorities and if their respective jurisdictions have appropriate legislation.
The FAQs answer specific questions on financial institutions (FIs), financial accounts, due diligence, and declaration / reporting. In Luxembourg, reporting FIs may do the following (list is not exhaustive):
- Use service providers to fulfill due diligence and reporting obligations.
- Communicate “zero reporting.”
- Apply due diligence procedures for new accounts to pre-existing accounts.
- Apply due diligence procedures for high-value accounts to low-value accounts.
- Apply residence address test to all pre-existing low-value accounts.
On July 11, 2014, Luxembourg ratified the 2010 protocol to the OECD Convention on Mutual Administrative Assistance in Tax Matters (the “OECD Convention”), which entered into force on November 1, 2014 in Luxembourg. The OECD Convention includes provisions regarding the exchange of information on request, spontaneous information exchange, tax examinations in other countries, simultaneous tax examinations and assistance in tax collection. On December 24, 2015, Luxembourg enacted the CRS provisions, which entered into force on December 31, 2015. For the 2016 tax year, Luxembourg FIs will have to provide information to the tax authorities beginning on June 30, 2017.
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