globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

23 October 2020

Luxembourg Tax Authorities publish XML schema and User Guide on submitting MDR reports

Executive summary

On 14 October 2020, the Luxembourg Tax Authorities (LTA) released the Mandatory Disclosure Rules (MDR) XML schema and User Guide on submitting MDR reports. Such reports are required under the implementation of the European Union (EU) Directive on the mandatory disclosure and exchange of cross-border tax arrangements (referred to as DAC6 or the Directive).

Under DAC6, taxpayers and intermediaries are required to file information on reportable cross-border arrangements from 1 July 2020. However, reports will retrospectively cover arrangements where the first step is implemented between 25 June 2018 and 1 July 2020. On 24 July 2020, the deadline for the filing and exchange of information in Luxembourg on cross-border arrangements under DAC6 was deferred for six months.1

The newly issued User Guide provides more details regarding the submission of MDR reports via either manual entries of information on the MyGuichet platform and/or direct submissions of XML files. Both means of reporting are scheduled to be available as from 1 January 2021.

Detailed discussion

Intermediaries and relevant taxpayers will have two means for submitting reports to the tax authorities:

  1. Manual entry of information: The data for each individual report is entered in an online form located on the MyGuichet platform (the same platform through which tax returns are to be filed) and then transmitted to the LTA.
  2. XML upload: XML files are uploaded directly via the MyGuichet platform.

The interface will be available in English, French and German, but the information to be reported is to be provided in English.

The MDR XML-schema file has also been made available on the Luxembourg tax authorities’ website.

In both cases, authentication will be required to be able to submit reports, which requires a number of administrative steps. For that purpose, there are different products available which can be used to sign onto the MyGuichet platform: a LuxTrust Token, a LuxTrust Smartcard, LuxTrust Signing Stick or a Luxembourg electronic ID card (eID). Obtaining the authentication product may take a few weeks.

A User Guide provides more detailed information on the submission process of information regarding reportable tax arrangements under DAC6. The first part of the User Guide contains step-by-step instructions on how to complete an MDR report online and then submit to the LTA, including:

  • Data fields covering intermediaries, taxpayers and other persons involved (with related address, tax identification number and a series of other relevant information)
  • Other fields covering information in relation to the cross-border arrangement itself (name, description, submission or not to MBT, hallmark reference, value, currency, concerned Member States, reference to national tax laws)

The second part describes how to upload and submit an XML file via the MyGuichet platform. This submission is operated through a drag and drop of the XML file for the reportable transaction. The guidelines specify that the submission of zip files containing various XML files is possible but subject to the requirement that one XML file must contain only one cross-border arrangement declaration.

The system allocates an arrangement ID and a disclosure ID and generates a confirmation of submission. The report needs to be signed electronically before being submitted to the LTA.

In addition to submitting new reports, it will also be possible to submit: (i) additional reports that are related to an existing arrangement; and (ii) corrections to a report that has already been submitted to the LTA. In both cases, details of the previously filed report have to be specified when submitting the additional report. Where corrections need to be filed, the User Guide requests that the LTA be contacted as a first step. The User Guide also specifies that the interface cannot be used to withdraw a previously filed report. For such cases the LTA have to be contacted.

As the new tool is still in the testing phase further changes in the reporting process cannot be excluded.

Based on the information published, both options of submitting MDR reports shall be available as from 1 January 2021.

Next Steps

With the above practical developments, it becomes crucial for intermediaries and relevant taxpayers to prepare for the actual submission of reports that will have to be made as from 20 21, also in light of the potentially high penalties. Intermediaries and taxpayers should also take instant administrative steps to ensure they will be able to submit reports as of 1 January 2021.

Endnote

1. See EY Global Tax Alert, Luxembourg enacts deferral of MDR reporting deadlines for six months, dated 30 July 2020.

_____________________________________________________________________________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Tax Advisory Services Sàrl, Luxembourg City
Ernst & Young LLP (United States), Luxembourg Tax Desk, New York
Ernst & Young LLP (United States), Luxembourg Tax Desk, Chicago
Ernst & Young LLP (United States), Luxembourg Tax Desk, San Jose

ATTACHMENT

Document ID: 2020-6382

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more