On August 2nd 2016, draft law 7031 introducing country-by-country reporting (the “Draft Law”) was submitted to the Luxembourg Parliament with the aim of transposing into Luxembourg law:
CbC Reporting is applicable to multinational groups (“MNE”), i.e. groups that include two or more enterprises tax resident in different jurisdictions or carrying out a business through a permanent establishment in another jurisdiction, having a total consolidated group revenue exceeding EUR 750 million.
It is, in principle, the ultimate parent of the MNE that is obliged to submit the CbC report to the competent authority of the jurisdiction in which it is resident. The Draft Law provides that, in certain circumstances listed hereafter, the filing obligation is applicable to any entity part of the MNE and this is applicable both to EU and non-EU countries.
A Luxembourg tax resident group entity (which is not the ultimate parent of the MNE) will be required to file the CbC report in the following circumstances:
The CbC report includes two parts:
The reporting entities should file their CbC Reporting within 12 months after the last day of the relevant accounting year and the tax authorities should exchange such report with the concerned jurisdictions within 15 months after the last day of the relevant accounting year. The first reporting will be with respect to the year 2016 and an extended period of 18 months will be available to the tax authorities to proceed with the exchange of the information.
The infringement of any of the CbC report filing obligations will be sanctioned by a penalty that could amount to EUR 250k.