On 4 June, the Luxembourg government announced that EU member states had reached an agreement on tax reporting deadlines, giving individual countries the option to postpone DAC 6 and CRS reporting. The concession was granted to alleviate pressure on businesses and member states as a result of the Covid-19 crisis.
This optional deferral grants an extra three months to submit CRS reporting for the year 2019, and an extra six months for DAC 6—a three-month increase on the initial EC proposal of three months (outlined in our tax alert 2020-09).
Luxembourg has opted to postpone the deadline and is expected to issue a bill in this respect in the coming weeks. The bill is also expected to include a similar concession for FATCA reporting, with deadlines expected to be pushed back by 3 months for the year 2019.
Luxembourg law of 25 March 2020 implementing DAC 6
The text of the EU compromise proposal has not yet been made public, meaning that the precise details are, as yet, unknown. However, we expect a number of DAC 6 deadlines to be updated in the proposal:
Under the EU Common Reporting Standard (“CRS”) and the Foreign Account and Tax Compliance Act (“FATCA”), Luxembourg financial institutions provide the Administration des Contributions Directes (“ACD”) with information on “reportable financial accounts”. Tax information is to be submitted annually, on 30 June, covering the preceding calendar year. The ACD has until 30 September of the same calendar year to exchange this information with other relevant authorities, namely other CRS reportable jurisdictions and/or the U.S. Internal Revenue Service (“IRS”).
The 3-month extension would lead to the following new deadlines:
Until these legislative amendments come into force, the sanctions for late transmission of the information laid out in the laws should not be applied.
The Luxembourg bill will likely be issued as soon as the EU Council formally approves the revised proposal for a new directive to amend the DAC (Directive on Administrative Cooperation) directive. It will then have to follow the usual legislative process. It remains to be confirmed whether the start date for the notification obligations of intermediaries covered by the legal professional privilege would also be deferred until 1 January 2021.
Do you have questions on FATCA, DAC 6 or CRS reporting? Our tax advisory team is ready to help with the new timelines and requirements.
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