Luxembourg announces six month extension to DAC6 reporting and first set of guidance

Following the discussion at EU level for the extension of deadlines for the filing and exchange of information on reportable cross-border arrangements under DAC6 (see our recent blogposthere), Luxembourg has issued an announcement stating that it would introduce a draft law providing for a six month extension for the filing and exchange of information on reportable cross-border arrangements and it would not apply late filing penalties until the extension is implemented.

In practice, the new deadlines for the reporting of reportable cross-border arrangements would be:

• 28 February 2021 (instead of 31 August 2020) for the reportable cross-border arrangements of which the first step of implementation was between 25 June 2018 and 30 June 2020.
• 31 January 2021 for the reportable cross-border arrangements of which the start of their implementation or the earlier of being ready for implementation will be between 1 July 2020 and 31 December 2020.
• Within 30 days starting from 1 January 2021 for the reportable cross-border arrangements of which the start of their implementation or the earlier of being ready for implementation will be as from 1 January 2021.

The Luxembourg tax authorities have also issued some limited guidance on some aspects of DAC6 and its implementation. A particularly key element of that guidance is in relation to the so-called main benefit test which needs to be satisfied in relation to cross border arrangements that meet certain hallmarks. The test is whether one of the main benefits of the arrangement is a tax advantage. Luxembourg has indicated that, where an arrangement is consistent with the relevant tax legislation and its objectives, the main benefit test would not be satisfied. It would appear at first glance that this will be very helpful in relation to most Luxembourg structures that are contemplated by the applicable tax rules. We shall post a separate blog shortly on other elements of the guidance.

The Luxembourg announcement can be found here.

The official DAC6 Luxembourg webpage can be found here.

Our recent blog post on DAC6 can be found here.