Tax Update — April 2013

Arendt & Medernach has released the April 2013 edition of its Tax Update, which includes the latest news from Luxembourg, as well as covering international matters. In this issue, the firm discusses the adoption of the law on administrative co-operation in the field of direct taxation, the introduction of the bill regarding deferred taxation of unrealised capital gains upon migration, new VAT provisions and more.

On 27 February 2013, the Luxembourg Parliament (Chambre des Députés) adopted bill No. 6455 implementing Council Directive 2011/16/EU on administrative cooperation in the field of taxation (the Directive).

Based on OECD standards, the Directive enhances the cooperation between tax authorities of the Member States of the European Union. It provides for the exchange of information that is of foreseeable relevance to the administration and the enforcement of Member States’ tax laws. In this respect, it foresees that the exchange of information between tax authorities can be made upon request, automatically or spontaneously and prescribes standard forms and procedures as to how the information is exchanged. In addition, it also introduces other means of administrative cooperation (simultaneous controls, presence of foreign tax authorities during enquires, requests for notification and sharing of best practices). The Directive applies to taxes of all kinds with the exception of VAT, customs duties, excise duties and compulsory social contributions already covered by separate legislation. The Directive contains a most favoured nation clause: if a Member State provides wider cooperation to a third country than that provided for under the Directive it may not refuse such wider cooperation to another Member State that requests it on its own account. Finally, the Directive entered into force on 1 January 2013, with the exception of the provisions relating to automatic exchange of information which will enter into force on 1 January 2015…

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