Changes to FATCA and CRS Laws – Nil Reports Will Be Mandatory
July 14, 2020
The Luxembourg Law of 18 June 2020 provides for the following amendments to the FATCA Law (Luxembourg Law of 24 July 2015) and the CRS Law (Luxembourg Law of 18 December 2015):
Mandatory nil reporting:
- The CRS Law and the FATCA Law now expressly provide that from 1 January 2021, Luxembourg financial institutions will be required to submit a nil report if they do not have any reportable accounts or US accounts.
New obligations for Luxembourg financial institutions:
- They may not take any measures aimed to circumvent the provision of information.
- They must keep records of the actions taken and of evidence used to ensure compliance with their reporting and due diligence obligations.
- They must put in place controls, procedures and IT systems to ensure compliance with their reporting and due diligence obligations.
- The law introduces a fixed fine of EUR 10,000 if a Luxembourg financial institution fails to provide information or has not submitted a nil report within the legal deadline.
- In addition to this fixed fine, a fine of up to EUR 250,000 may be imposed on a Luxembourg financial institution if, after review, the tax administration finds that it has not complied with its obligations under the CRS Law or the FATCA Law.
Authority of the tax administration:
- The Luxembourg tax administration is responsible for monitoring compliance with all obligations imposed on Luxembourg financial institutions. Upon request, the tax administration has the right to access records of actions taken and evidence used, as well as of the controls, procedures and IT systems put in place by financial institutions.
- The limitation period is 10 years, beginning at the end of the calendar year in which the Luxembourg financial institution must provide the information.