Luxembourg to implement automatic exchange of tax information with EU members


New regime to be introduced on 1 January 2015

Luxembourg’s Prime Minister announced an intention to introduce measures allowing for the automatic exchange of information for all interest payments made by Luxembourg financial operators to individuals residing in another EU Member State (within the scope of the 2003 EU Savings Directive). The planned automatic exchange of tax information measures are intended to be effective 1 January 2015.

For individuals residing in Luxembourg, the current 10% withholding tax applicable to savings revenues received from a Luxembourg financial operator would continue to apply, with banking secrecy rules retained in the existing format. For U.S. citizens or residents, the rules will be clarified by a bilateral agreement – reported to be currently under negotiation between Luxembourg and the United States.

Payments made to residents of third countries will remain unchanged and subject to the bilateral non-double taxation agreements between Luxembourg and these countries.