Phase 2.

143 Pages·2014·1.963 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 2: LUXEMBOURG
This report contains a “Phase 2: Implementation of the Standard in Practice” review, as well
as revised version of the “Phase 1: Legal and Regulatory Framework” review already released
for this jurisdiction. Peer Review Report
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of Phase 2
information is carried out by 120 jurisdictions, which participate in the Global Forum on an
equal footing. Implementation of the Standard
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the international standards of transparency and exchange of information for tax purposes. in Practice
These standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange
of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model
P
Tax Convention on Income and on Capital and its commentary as updated in 2004. The ee LUXEMBOURG
standards have also been incorporated into the UN Model Tax Convention. r R
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The standards provide for international exchange on request of foreseeably relevant ie
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information for the administration or enforcement of the domestic tax laws of a requesting R
party. Fishing expeditions are not authorised but all foreseeably relevant information must be ep
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provided, including bank information and information held by fi duciaries, regardless of the r
existence of a domestic tax interest or the application of a dual criminality standard. t Ph
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as e 2
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 Im
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange p
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of information, while Phase 2 reviews look at the practical implementation of that framework. m
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Some Global Forum members are undergoing combined – Phase 1 and Phase 2 – reviews. n
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The Global Forum has also put in place a process for supplementary reports to follow-up tio
on recommendations, as well as for the ongoing monitoring of jurisdictions following the n o
conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the f th
international standards of transparency and exchange of information for tax purposes. e S
ta
All review reports are published once approved by the Global Forum and they thus represent n
d
agreed Global Forum reports. a
rd
For more information on the work of the Global Forum on Transparency and Exchange of in
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Information for Tax Purposes, and for copies of the published review reports, please refer to ra
www.oecd.org/tax/transparency and www.eoi-tax.org. ctic
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Consult this publication on line at http://dx.doi.org/10.1787/9789264202672-en. E
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and O
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statistical databases. R
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Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-20266-5 -:HSTCQE=WUW[[Z:
23 2013 30 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Luxembourg 2013
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
November 2013
(reflecting the legal and regulatory framework
as at May 2013)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2013),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Luxembourg2013:Phase2:ImplementationoftheStandardinPractice,OECDPublishing.
http://dx.doi.org/10.1787/9789264202672-en
ISBN978-92-64-20266-5(print)
ISBN978-92-64-20267-2(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda.
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive Summary                                                 7
Introduction                                                       11
Information and methodology used for the peer review of Luxembourg       11
Compliance with the Standards                                       19
A. Availability of Information                                        19
Overview                                                        19
A1 Ownership and identity information                               21
A2 Accounting records                                            54
A3 Banking information                                           59
B. Access to Information                                            65
Overview                                                        65
B1 Competent Authority’s ability to obtain and provide information        67
B2 Notification requirements and rights and safeguards                  84
C. Exchanging Information                                          89
Overview                                                        89
C1 Exchange of information mechanisms                              92
C2 Exchange of information mechanisms with all relevant partners        104
C3 Confidentiality                                               107
C4 Rights and safeguards of taxpayers and third parties                 110
C5 Timeliness of responses to requests for information                  112
Summary of Determinations and Factors Underlying Recommendations   119
PEER REVIEW REPORT – PHASE 2 – LUXEMBOURG © OECD 2013
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s Response to the Review Report                  125
Annex 2: List of all Exchange-of-Information Mechanisms in Force       126
Annex 3: List of all agreements signed, allowing for the exchange of banking
information, to the standard and in force, including jurisdictions
covered by the EU Council Directive on Administrative
Cooperation in the Field of Taxation (2011/16/EU)              132
Annex 4: List of Laws, Regulations and Other Material Received         136
Annex 5: People Interviewed During the On-Site Visit                  139
PEER REVIEW REPORT – PHASE 2 – LUXEMBOURG © OECD 2013
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for Tax
Purposes is the multilateral framework within which work in the area of tax
transparency and exchange of information is carried out by over 120 jurisdic-
tions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer review of
the implementation of the international standards of transparency and exchange
of information for tax purposes These standards are primarily reflected in the
2002 OECD Model Agreement on Exchange of Information on Tax Matters
and its commentary, and in Article 26 of the OECD Model Tax Convention on
Income and on Capital and its commentary as updated in 2004 The standards
have also been incorporated into the UN Model Tax Convention
The standards provide for international exchange on request of foreseeably
relevant information for the administration or enforcement of the domestic tax
laws of a requesting party Fishing expeditions are not authorised but all fore-
seeably relevant information must be provided, including bank information
and information held by fiduciaries, regardless of the existence of a domestic
tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by the
Global Forum as relevant to its work, are being reviewed This process is under-
taken in two phases Phase 1 reviews assess the quality of a jurisdiction’s legal
and regulatory framework for the exchange of information, while Phase 2 reviews
look at the practical implementation of that framework Some Global Forum
members are undergoing combined – Phase 1 and Phase 2 – reviews The Global
Forum has also put in place a process for supplementary reports to follow-up on
recommendations, as well as for the ongoing monitoring of jurisdictions following
the conclusion of a review The ultimate goal is to help jurisdictions to effectively
implement the international standards of transparency and exchange of informa-
tion for tax purposes
All review reports are published once approved by the Global Forum and
they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency and
Exchange of Information for Tax Purposes, and for copies of the published review
reports, please refer to wwwoecdorg/tax/transparency and wwweoi-taxorg
PEER REVIEW REPORT – PHASE 2 – LUXEMBOURG © OECD 2013

EXECUTIVE SUMMARY – 7
Executive Summary
1 This report summarises the legal and regulatory framework for
transparency and exchange of information for tax purposes in Luxembourg
as well as the practical implementation of that framework The assessment of
exchange of information in practice covers the three year period 2009 to 2011
The international standard laid down in the Terms of Reference of the Global
Forum for monitoring and reviewing progress towards transparency and
exchange of information, considers the availability of relevant information
within a given jurisdiction, the ability of the competent authority to access it
swiftly, and whether the information may be exchanged effectively with its
partners in information exchange
2 Since its commitment to the international standard of transparency
and exchange of information, in March 2009, Luxembourg has been very
active and quick in negotiating EOI mechanisms that incorporate the full
version of article 26 of the OECD Model Tax Convention 1 Luxembourg’s
network of bilateral information exchange mechanisms now comprises 75 2
agreements, 45 of which contain article 26 allowing for the exchange of bank-
ing information and 43 of which are to the standard Of the 43 agreements
to the standard 23 are in force Luxembourg is also party to the EU Council
Directive on Administrative Cooperation in the Field of Taxation 2011/16/
EU This Directive has been in effect since 1 January 2013 As a result,
Luxembourg has EOI relationships to the standard with 54 jurisdictions and
can already exchange information with 40 of them (arrangements in force)
3 In two cases – Austria and Panama – the obligations stipulated in the
recently negotiated protocols are more restrictive than those established by
the international standard However, since 2013, Austria has been covered
by the EU Council Directive on Administrative Cooperation in the Field
1 The 2005 revised version
2 See Annex 3 for the agreements signed, allowing for the exchange of banking
information, to the standard and in force, including the jurisdictions covered by
the EU Council Directive on Administrative Cooperation in the Field of Taxation
2011/16/EU
PEER REVIEW REPORT – PHASE 2 – LUXEMBOURG © OECD 2013
8 – EXECUTIVE SUMMARY
of Taxation (2011/16/EU) Luxembourg has proposed to its treaty partners
to update the treaties still not meeting the standard and is in negotiations
with 24 jurisdictions A total of 18 new agreements or protocols 3 have been
signed since 2011, all of which should be ratified shortly The two draft laws
ratifying 15 4 of these new agreements or protocols have been enacted by
Parliament on 7 June 2013 and the laws are expected to be published by the
end of June 2013 Luxembourg needs to continue updating of its network of
tax treaties so that all its partners can access the information held by financial
institutions
4 In order to conform to the international transparency standard,
Luxembourg introduced, legislation, in 2010, governing access to banking
information or information protected by secrecy rules This legislation imple-
ments Luxembourg’s international commitments into domestic law
5 Banking information is available due to the anti-money laundering
(AML) legislation, amongst other things The rules according to which infor-
mation relating to numbered accounts must be kept derive from a grand ducal
regulation adopted on 1 February 2010 This regulation was complemented
by a new CSSF (Financial Sector Supervisory Commission – Commission de
Surveillance du Secteur Financier) regulation adopted on 14 December 2012,
which clarifies that these rules are applicable to numbered accounts opened
prior to the regulation of February 2010, and addresses concerns expressed
in the Phase 1 review
6 Luxembourg law generally guarantees the availability of information
on companies and partnerships All companies and partnerships must regis-
ter with the Register of Commerce and Companies (Registre du commerce
et des sociétés, “RCS”) within a month of their creation The law usually
requires the provision of information to the RCS relating to the shareholders
and partners of these companies and partnerships as well as updates to this
information However sociétés anonymes (SAs, or public limited compa-
nies), sociétés en commandite par actions (Secas, or partnerships limited by
shares), and sociétés européennes (SE, European companies) are themselves
required to keep information on the holders of registered shares, through a
register of shares Comments received from peers confirm that ownership
information has been provided in those cases where it has been requested
7 Luxembourg law authorises the issuance of bearer securities by
SAs, Secas, and SEs, but there are no mechanisms in place to ensure the
3 Canada, Czech Republic, FYROM, Isle of Man, Italy, Jersey, Kazakhstan, Laos,
Malta, Poland, Romania, the Seychelles, South Korea, Sri Lanka, Switzerland,
Tajikistan, Chinese Taipei and Russia
4 Canada, FYROM, Italy, Kazakhstan, Laos, Malta, Poland, Romania, Russia, the
Seychelles, South Korea, Sri Lanka, Switzerland, Tajikistan and Chinese Taipei
PEER REVIEW REPORT – PHASE 2 – LUXEMBOURG © OECD 2013