Luxembourg Rules On Exchange Of Information Upon Request Amended

Author:Mr Romain Tiffon and Samantha Schmitz-Merle
Profession:ATOZ Tax Advisers
 
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OUR INSIGHTS AT A GLANCE

In 2017, a decision of the Court of Justice of the European Union made clear that the Luxembourg rules applicable to exchange of information upon request were not in line with EU law. On 14 February 2019, the draft law aiming at bringing Luxembourg rules in line with EU law was passed by the Parliament. Based on the new rules, the Luxembourg tax authorities have to check the foreseeable relevance of the information requested by foreign tax authorities and information holders can contest information requests received from the Luxembourg tax authorities. Following the decision of the Court of Justice of the European Union ("CJEU") of 16 May 2017 in the Berlioz case (C-682/15), the Luxembourg legislator had to amend the Luxembourg rules on exchange of information upon request so as to bring them in line with EU law.

Following a legislative procedure which took more than one year with several amendments introduced by both the government and the parliament, on 14 February 2019, the draft law was finally voted.

Foreseeably relevance of information requests

Back in December 2013, Luxembourg received criticism from the Global Forum on Transparency and Exchange of Information. The report of the Global Forum highlighted that "the interpretation of the foreseeably relevant standard in Luxembourg is unduly restrictive and prevents it from engaging in effective exchange of information in line with the international standards in certain cases".

Blamed for an unduly restrictive interpretation of the concept of foreseeable relevance, Luxembourg reacted quickly and passed a law that would guarantee an efficient mechanism of exchange of information upon request: the law of 25 November 2014 made sure that the Luxembourg tax authorities were no longer allowed to assess the pertinence of the information requested. In other terms, tax inspectors were no longer allowed to decline a request from a foreign authority on the grounds that the requested information lacked relevance. They were only allowed to verify if the request satisfied the formal conditions, as defined in the relevant tax treaty or law provision.

Less than three years later, the EU conformity of the new Luxembourg rules was assessed by the CJEU which ruled that the "foreseeable relevance of the information requested by one Member State from another Member State is a condition which the request for information must satisfy in order for the requested Member State to be...

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