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FATCA e-alert issue 2015-07 / Luxembourg Tax News issue 2015-10

FATCA e-alert issue 2015-07 / Luxembourg Tax News...



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FATCA bill of law adopted by Luxembourg Government

On 6 March 2015, the Council of Government adopted the long awaited bill of law on FATCA.



The Foreign Account Tax Compliance Act (“FATCA”) was signed into law in the United States (“U.S.”) on 18 March 2010. Its purpose is to identify U.S. persons who may be evading U.S. taxes by investing through non-U.S. financial institutions or other non-U.S. entities. To accomplish this goal, FATCA creates a new information reporting and withholding regime, in addition to existing U.S. information reporting and withholding rules.

As the compliance to the U.S. FATCA regulations would have been contrary to legal restrictions in some countries, the U.S. entered into a series of intergovernmental agreements (“IGA”) with interested jurisdictions. These IGAs should address legal impediments and simplify the practical implementation of FATCA.


FATCA in Luxembourg

On 28 March 2014, Luxembourg signed a Model 1 IGA with the U.S. Treasury.

The announcement made by the Council of Government on 6 March 2015 is a decisive step forward since it opens the door to an actual ratification of the Luxembourg IGA.


Next steps

As a next step, the bill of law will be submitted to the Parliament.

It is expected that the Luxembourg Tax Authorities will then review and finalise the two draft circular letters published earlier this year.

Projet de-circulaire-ECHA-2---FATCA.pdf (PDF, 265 KB)

Projet-de-circulaireECHA-n_-3---FATCA.pdf (PDF, 2.14 MB)

After completion of these last two steps, Luxembourg should be fully FATCA compliant and ready to proceed with the first automatic exchange of information on FATCA (expected to take place on 30 June 2015 from Luxembourg reporting financial institutions to Luxembourg Tax Authorities and then on 30 September 2015 from the Luxembourg Tax Authorities to the U.S. Tax Authorities).


For further information, please do not hesitate to contact us.







Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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