On 07 May 2018, the Luxembourg tax administration (LTA) published a circular aimed at facilitating an examination of transactions in which Luxembourg collective undertakings (CUs) engage with related entities established in jurisdictions on the EU list of non-cooperative jurisdictions.
On 07 May 2018, the Luxembourg tax administration (LTA) published a circular (the Circular) in relation to defensive measures in connection with the European Union list of non-cooperative jurisdictions. This Circular aims to facilitate a close examination of transactions in which Luxembourg collective undertakings (CUs) engage with related entities (in the sense of Luxembourg transfer pricing rules) established in jurisdictions deemed non-cooperative.
Accordingly, the Circular clarifies that the LTA will carry out enhanced monitoring of such transactions and require that Luxembourg CUs report in their corporate tax returns if they have undertaken transactions with related entities located in non-cooperative jurisdictions.
The information to be reported to the LTA includes the total amount, income and expenses linked to the transactions in question. Affected taxpayers should also have available copies of receivables and payables in relation to such related entities for the LTA’s review in the context of their tax assessment.
The LTA has indicated that the applicable version of the EU list to be taken into account for the above purposes is the one available at year-end of the fiscal period of the concerned Luxembourg tax payer. Reporting should start in 2019 in the context of the tax compliance for the fiscal period 2018.
For more information in this respect and to assess what this entails, please contact any member of the Luxembourg tax team.
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