FATCA and CRS governance: the law has been voted

18/06/20

In Brief

The Luxembourg law (the Bill) requesting all Luxembourg Financial Institutions (“FIs”) to notably establish a compliance framework and file CRS reports even in the absence of any reportable clients or investors (nil report concept) has been approved by the parliament on 16 June 2020.

In detail

On 16 June, 2020, the Bill modifying the law of 24 July 2015 on FATCA (“FATCA Law”) and the law of 18 December, 2015, on CRS (“CRS Law”) to impose on FIs to establish a compliance programme has been enacted.

The Bill was not materially amended (apart from wording changes) compared to the version proposed by the Luxembourg government.

As a reminder, the main objective of the Bill is to force FIs to implement a sound compliance governance around FATCA and CRS.

This law should be effective as from 1 January, 2021, and as such FIs should start reviewing the processes and procedures.

For more information, please refer to our previous article: FATCA and CRS governance and controls mechanisms: obligation to have a compliance program

What’s next?

FIs should start to implement a FATCA/CRS compliance programme and reflect on how they want to evidence oversight on delegated functions (e.g. use of due diligence questionnaires, requesting a third party carry out a health check etc.). FIs that have already implemented a FATCA/CRS compliance programme should review the existing policies and procedures in the light of the requirements under the new provisions.

As best practice, this could also be the opportunity to build a broader tax governance (e.g. including matters such as withholding tax, VAT, DAC 6 etc).

Our FATCA and CRS dedicated expert team can provide you with a full range of services around those topics including:

  • drafting of procedures and controls matrix;

  • reporting through our online dedicated and collaborative platform;

  • review of self-certifications;

  • due diligence on service providers (e.g. on Transfer Agents for the fund industry); and

  • organisation of dedicated training. 

We will be pleased to organise a meeting with you to further discuss the impact of this draft law and how we could assist you going forward.

1. PwC Luxembourg (www.pwc.lu) is the largest professional services firm in Luxembourg with 3,000 people employed from 75 different countries. PwC Luxembourg provides audit, tax and advisory services including management consulting, transaction, financing and regulatory advice. The firm provides advice to a wide variety of clients from local and middle market entrepreneurs to large multinational companies operating from Luxembourg and the Greater Region. The firm helps its clients create the value they are looking for by contributing to the smooth operation of the capital markets and providing advice through an industry-focused approach.

2. The PwC global network is the largest provider of professional services in the audit, tax and management consultancy sectors. We are a network of independent firms based in 158 countries and employing over 250,000 people. Talk to us about your concerns and find out more by visiting us at www.pwc.com and www.pwc.lu.

Contact us

Murielle Filipucci

Tax Partner, FS Banking, PwC Luxembourg

Tel: +352 49 48 48 3118

Kerstin Thinnes

Partner, Tax Information Reporting, PwC Luxembourg

Tel: +352 49 48 48 3177

Vincent Lebrun

Alternatives Leader, Tax Partner, PwC Luxembourg

Tel: +352 49 48 48 3193

Géraud de Borman

Tax Partner, Insurance, PwC Luxembourg

Tel: +352 49 48 48 3161

Oliver Weber

Partner, Asset and Wealth Management Leader, PwC Luxembourg

Tel: +352 49 48 48 3175

Pierre Kirsch

Managing Director, Tax Information Reporting, PwC Luxembourg

Tel: +352 49 48 48 4031

Amandine Horn

Director, Tax Information Reporting, PwC Luxembourg

Tel: +352 49 48 48 2026

Camille Perez

Director, Tax Information Reporting, PwC Luxembourg

Tel: +352 49 48 48 4618