Further to the conclusions reached by the Council of the European Union on December 5th 2017 on the European Union list of non-cooperative countries and territories for tax purposes (hereafter the “EU List”), the director of the Luxembourg direct tax authorities (hereafter the “ACD”) has issued a circular detailing defensive measures that the ACD will take towards transactions involving countries and territories included on said list.
As a general measure, the ACD will put companies having used structures or arrangements involving countries and territories listed in the EU List under enhanced monitoring. Luxembourg resident companies will thus be required to indicate in their tax returns, starting with the fiscal year 2018, whether they have had transactions with related parties (as defined in the article 56 of the Luxembourg income tax law) located in countries and territories listed in the EU List. The details of the transactions in question, as well as the statement of receivables and payables to such companies, will have to be made available to the ACD upon request or in the event of an on-site tax audit.
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