On July 19, 2024, the Finance Commission at the Chamber of Deputies presented an amendment to the draft Bill of Law 8186, splitting it into two distinct proposals: 8186A and 8186B.

⚖ 𝗠𝗮𝗶𝗻 𝗣𝗼𝗶𝗻𝘁𝘀 𝗼𝗳 𝟴𝟭𝟴𝟲𝗔:
➡ Modifies the General Tax Law (Abgabenordnung) of May 22, 1931: Introduces changes to improve the efficiency and transparency of tax processes.
➡ Revises the Direct Contributions Recovery Law of November 27, 1933 (Art. 2): Enhances the mechanisms for collecting direct taxes, excise duties, and social security contributions.
➡ Enhanced Data Sharing with Financial and Insurance Regulators (Art. 3): Facilitates the exchange of information between the ACD and financial/insurance regulators, such as the CSSF and CAA, to combat tax evasion and money laundering.

⚖ 𝗠𝗮𝗶𝗻 𝗣𝗼𝗶𝗻𝘁𝘀 𝗼𝗳 𝟴𝟭𝟴𝟲𝗕:
➡ Modifies the General Tax Law (Abgabenordnung) of May 22, 1931: Includes several key updates:
✔ Tax Agreement Procedures (Art. 1, Par. 29c): Formalizes bilateral and multilateral agreements on transfer pricing, with fees from €10,000 to €20,000.
✔ New Provision (Article 1, Paragraph 96a): Permits tax notices to be issued, withdrawn, or modified under mutual agreements or arbitration decisions to prevent double taxation and tax evasion.
✔ Annual Accounts Provision (Art. 1, Par. 160(1a)): States that unpublished annual accounts are not opposable to the ACD.
✔ Changes to Notification and Appeal Processes (Art. 1, Par. 165c and 249): Updates processes for better communication and transparency with taxpayers.
✔ Transfer Pricing Documentation Requirements (Art. 1, Par. 171): Mandates companies to provide documentation justifying their transfer pricing policy upon request. The scope, content, and extent of this documentation will be determined by Grand Ducal regulation. A Draft Grand-Ducal regulation (61388) detailing these requirements was released in March 2023. As of today, this regulation remains in draft with no further updates.
➡ Modifies the organization of administrative court law of November 7, 1996: Revises the Structure and Procedures of Administrative Courts (Art. 2).
✔ Paragraph 3: If no decision within six months, claimants can appeal.
✔ New Point 5: Sets a twelve-month appeal period, extendable by six months if an investigation is ordered.

📅 𝗜𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗗𝗮𝘁𝗲𝘀:
➡ January 1, 2024: Changes to tax notifications and procedural updates will take effect.
➡ Tax Year 2024: New administrative procedures and transfer pricing documentation requirements will start.

🎯 𝗘𝘅𝗽𝗲𝗰𝘁𝗲𝗱 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹:
The first constitutional vote by the Chamber of Deputies for 8186A is anticipated in autumn 2024. Meanwhile, further discussions will be conducted for 8186B to ensure comprehensive consideration of its provisions.

Vanesa Ramos Ferrin - TransFair Pricing Solutions

 

Notes to editors
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