DAC 6 implementation in Luxembourg: What's important?

Generally, the competent authority for the purposes of DAC 6 will be the Luxembourg direct tax authorities (Administration des contributions directes), except that the professionals benefitting from a professional secrecy privilege will have as well to notify any other relevant intermediary (itself subject to reporting), and if there is none, the taxpayer itself. As mentioned above, when the notification is made to the taxpayer itself appropriate information will also have to be provided to such taxpayer. 

To whom needs to be reported?

Whilst the current wording of DAC 6 and the DAC 6 Law do seem to imply this meaning, a confirmation would have been helpful that the above notification obligation by professionals will be complied with as soon as one relevant intermediary – and not all of them - has been duly notified.

This notification obligation to another intermediary may raise certain issues. For instance, to what extent should a notification by a professional benefitting from a professional secrecy privilege be considered as a reason to report an arrangement, even though the noticed intermediary may consider the arrangement not to be reportable. Further, could the decision to not report in such a scenario increase the penalties for the relevant intermediary, based on the argument that a notification of the presence of a reportable arrangement had been made by a professional? 

Whilst each intermediary within the meaning of the DAC 6 Law should, in principle, have to do its own analysis to perform, or not, a reporting and should hence be responsible for its own analysis, written clarification or guidelines would seem useful in relation to the points mentioned above.

Finally, there are no guidelines as to whether an intermediary subject to reporting must, or mustn't, notify or otherwise inform the relevant taxpayer. As such, it is likely that intermediaries performing a reportable arrangement will inform the relevant taxpayer based already on a good client relationship approach.

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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