Luxembourg has implemented Country-by-Country Reporting (CbCR) in line with the OECD Base Erosion and Profit Shifting (BEPS) Action 13 framework and EU Directive 2016/881. The Luxembourg Tax Authority (Administration des Contributions Directes – ACD) oversees the enforcement of CbCR regulations. These rules aim to enhance tax transparency, prevent profit shifting, and comply with international tax reporting obligations.

This guide provides CFOs and tax professionals with an overview of Luxembourg’s CbCR framework, including applicability, reporting obligations, filing procedures, penalties, and key resources.

Applicability of CbCR in Luxembourg

Criteria for Reporting

CbCR obligations apply to multinational enterprise (MNE) groups that:

• Have consolidated annual revenue of at least EUR 750 million in the preceding financial year.
• Include at least one entity or permanent establishment (PE) in Luxembourg.

Local Filing Requirements

A Luxembourg entity must file a CbC report if:

• It is the Ultimate Parent Entity (UPE) of the MNE group.
• It has been designated as the Surrogate Parent Entity (SPE) for CbCR purposes.
• The UPE is in a jurisdiction that does not require CbCR or does not have a qualifying exchange agreement with Luxembourg.

Relevant Legislation

• Law of 23 December 2016 – Implements CbCR in Luxembourg.
• EU Directive 2016/881 – Establishes CbCR requirements across EU member states.
• OECD BEPS Action 13 – Forms the basis for Luxembourg’s CbCR regulations.

Reporting Requirements

Content of the CbC Report

The CbC report must contain jurisdictional financial data, including:

• Total revenues (from related and unrelated party transactions).
• Profit or loss before income tax.
• Income tax paid and accrued.
• Stated capital and retained earnings.
• Number of employees.
• Tangible assets, excluding cash or cash equivalents.

Notification Requirement

• All Luxembourg entities within an MNE group must notify the ACD regarding which entity will file the CbC report and in which jurisdiction.
• The notification must be submitted electronically via MyGuichet.lu before the end of the financial year.

Submission Platform

• Reports must be electronically filed via the ACD eFiling portal, using the OECD CbCR XML schema.

Resource

Filing instructions and guidelines are available on the Luxembourg Tax Authority (ACD) website:
Administration des Contributions Directes (ACD)

Filing Deadlines

• CbC Reports: Must be filed within 12 months after the end of the financial year.
  • Example: For a financial year ending 31 December 2023, the report must be submitted by 31 December 2024.
• Notifications: Must be filed before the end of the financial year.

Penalties for Non-Compliance

Penalties and Consequences

Failure to comply with Luxembourg’s CbCR requirements may result in:

• Fines of up to EUR 250,000 for failure to submit, late submission, or inaccurate reporting.
• Additional penalties for persistent non-compliance.
• Increased scrutiny from the ACD, leading to potential tax audits.

Mitigation Measures

• Companies can request extensions or appeal penalties if they can demonstrate reasonable cause for non-compliance.

Confidentiality and Data Exchange

Data Protection

• The ACD ensures that CbC reports remain confidential and are only used for tax risk assessment purposes.
• Reports are automatically exchanged with jurisdictions that have a bilateral exchange agreement with Luxembourg.