DAC 6, CRS and FATCA: Luxembourg law transposing deadlines extension for Automatic Exchanges of Information regimes has been voted

28/07/20

In Brief

On 6 July 2020, the Luxembourg government issued a draft bill (n°7625) aiming to enact the extension of reporting deadlines, in accordance with the provisions of the Directive 2020/876 adopted on 24 June 2020. The extensions are for three months for CRS and FATCA regarding 2019 obligations, and for six months for DAC 6 obligations. On 22 July 2020, the Luxembourg Parliament voted to approve the draft bill, which was published in the Memorial on 24 July 2020 (the “Law of 24 July 2020”).

In detail

The Law of 24 July 2020 amends the law of 24 July 2015 implementing FATCA, and the law of 18 December 2015 regarding CRS, to specify that the exchange of information relating to the calendar year 2019, between Member States under DAC 2 (i.e. the Directive implementing CRS within the EU), would occur at the latest by 31 December 2020 (instead of 30 September 2020). Luxembourg financial institutions would also be authorised to provide required information to the Luxembourg tax authorities by 30 September 2020, rather than the 30 June 2020 initial deadline, thus also benefiting from this three-month extension period.

As regards DAC 6, the Law of 24 July 2020 provides a postponement of six months of the various obligations for intermediaries and taxpayers affected, as follows: 

  • The final deadline for filing arrangements linked to the transition period (reportable arrangements - the first step of which was implemented between 25 June 2018 and 30 June 2020) is postponed to 28 February 2021;

  • The date for the beginning of the period of 30 days for reporting by intermediaries (or taxpayers) on reportable cross-border arrangements for which the first step of implementation occurs between 1 July 2020 and 31 December 2020 (the “post-transition” period) is changed from 1 July 2020 to 1 January 2021. 

This also applies for the starting of the 10-day period applicable to intermediaries benefiting from legal privilege in relation to their obligation of notification for the post-transition period;

  • Exchanges of information between Member States under DAC 6 would first occur at the latest on 30 April 2021 (instead of 31 October 2020).

Finally, the above extensions of deadlines enter into force with retroactive effect as from 30 June 2020.

In conclusion

Even if the deadlines have been extended, Luxembourg taxpayers qualifying as intermediaries under DAC 6, or having secondary reporting obligations (e.g. because there is no intermediary involved, or because the intermediaries involved are subject to legal privilege), should continue to prepare for the application of the DAC 6 measures, and should already start to review their “historical” arrangements, notably based on the result of their impact assessments.

1. Council Directive (EU) 2020/876 of 24 June 2020 amending Directive 2011/16/EU to address the urgent need to defer certain time limits for the filing and exchange of information in the field of taxation because of the COVID-19 pandemic 

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