DAC 6 implementation in Luxembourg: What's important?

The report to the Luxembourg tax authorities should be made within 30 days from the earliest of the following dates (each a "Triggering Event"):

When has the reporting to be made?

1.1 General rule for intermediaries

  • the day after the reportable arrangement is made available for implementation; or
  • the day after the reportable arrangement is ready for implementation; or
  • the day when the first step in the implementation of the reportable arrangement has been made.

However, for any reportable arrangements whose Triggering Event took place between 25 June 2018 and 1 July 2020, the reporting would have to take place between 1 July 2020 and 31 August 2020 at the latest.

Unfortunately, no definition or guidance regarding the meaning of "made available for implementation" or "first step in the implementation" can be found in the DAC 6 Law or the DAC 6 Bill commentaries. Since those concepts seem to require a distinct transaction that is actually contemplated to be carried out, general advice or mere discussions may be considered, in line with the Chamber of Commerce Opinion, to fall outside of such concepts.

1.2 Additional obligation for Service Providers 

Notwithstanding item 1.1 above, Service Providers shall also be required to file information within 30 days beginning on the day after they provided, directly or by means of other persons, aid, assistance or advice.

1.3 Additional obligation for taxpayers 

In the absence of intermediaries, or the mere presence of professionals benefitting from a professional secrecy privilege, the reporting to the Luxembourg tax authorities should be made by the taxpayers themselves within 30 days from the earliest of the Triggering Events.

In addition, the taxpayers will also have to report, in their annual income tax return, the use of the reportable arrangement for each of the years where they exploit it.

1.4 Additional obligation in case of marketable arrangements

In case of marketable arrangements, intermediaries shall submit a periodic report every 3 months providing an update which contains new reportable information as referred to in points (a), (d), (g) and (h) of section 4 above that has become available since the last report was filed.

Unclear is currently whether such periodic reports are also required notwithstanding the absence of any updates.

1.5 General principle for the Luxembourg direct tax authorities

The Luxembourg direct tax authorities will exchange, on a trimestral basis, the relevant information received under the DAC 6 Law with the other EU Member States and to a certain extend with the European Commission. The first reporting by the Luxembourg tax authorities is expected to take place on 31 October 2020 at the latest.

A detailed summary of the main topics regarding the DAC 6 Law may be found on our Hogan Lovells blog:

  1. What are the origins of DAC 6?
  2. Who needs to report?
  3. To whom needs to be reported?
  4. What kind of arrangements need to be reported?
  5. What information needs to be communicated?
  6. When has the reporting to be made?
  7. What penalties are foreseen?
  8. Concluding remarks

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