EXCHANGE OF INFORMATION BETWEEN LUXEMBOURG AND FOREIGN TAX
EXCHANGE OF INFORMATION BETWEEN LUXEMBOURG AND FOREIGN TAX ADMINISTRATIONS 1
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Historical Background • 2005: international initiatives to reinforce exchange of information to avoid / prevent tax fraud • 2005 -2012: expansion of the scope of exchange of information 3 3
GENERAL PROCEDURE FORESEEN BY DOUBLE TAX TREATIES Director of Luxembourg Tax Administration Company / Bank Administrative decision for information request Information request regarding tax payer Examples of information requests: Bank account holder beneficial owner of bank account Option 1: Provide information within 1 month* Director of Luxembourg Tax Administration *fine up to EUR 250, 000 Option 2: claim within 1 month (bank or taxpayer) Administrative Tribunal appeal procedure Foreign Tax Administration Administrative Court 4
CASE STUDY 1: Court of Appeal 24 May 2012 Director of Luxembourg Tax Administration Information request regarding Malaysian Company (tax payer) Luxembourg Bank Administrative decision for information request Claim (by Malaysian Company) Administrative Tribunal Swedish Tax Administration Requested information (among others): - Bank account holder - Balance of accounts - persons allowed to proceed to bank operations on account Information request approved appeal Administrative Court Information request denied 5
Analysis by Court of Appeal Main criteria for an information request: • prohibition for a Tax Administration to proceed to « fishing expedition» • Requested information must be « foreseeably relevant » • Information request denied by Court: Purpose of the information request was to obtain information on other persons than the « person under investigation » 6 6
Latest News for exchange of information • Since March 2013: Procedure for exchange of information on European level • Expansion of exchange of information to several non EU countries (i. e. , Canada, South Korea, Malta, Poland, Romania, Russia, Switzerland, Kazakhstan, Macedonia, Seychelles and Tadjikistan) 7 7
What can be expected for the future? • FATCA regulation: automatic exchange of information regarding US citizens • Latest EU regulation introduces « most favored nation » clause • What will be Luxembourg’s position on bank secrecy / exchange of information on an international / EU Level? 8 8
Questions ? Christophe JOOSEN Tél: +352 26 12 29 45 christophe. joosen@nautadutilh. com Cédric SCHIRRER Tel: +352 45 31 13 cschirrer@wagenerlegal. lu 9
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