Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

February 25, 2021

Luxembourg Tax Authorities update MDR guidance

Executive summary

The Luxembourg Tax Authorities, on 13 May 2020, issued guidance (the Guidance) addressing 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 report cross-border reportable 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 17 February 2021, the Guidance was updated to address the impact of Brexit on the obligations under the Luxembourg implementation of DAC6 and to provide some guidance on the concept of a participant in an arrangement. In addition, the Guidance provides for further clarification with respect to marketable arrangements and to certain items related to the reporting process.

This Alert only highlights the modifications and clarifications provided by the updated version of the Guidance. The elements that are not discussed in this Alert have not been modified in the Guidance. For additional details on Luxembourg’s MDR Guidance, see EY Global Tax Alert, Luxembourg Tax Authorities issue MDR Guidance, dated 2 June 2020.

Key highlights

Impact of Brexit on the reporting and notification of intermediaries and taxpayers concerned

The change in scope of the United Kingdom (UK) mandatory disclosure rules1 have raised many questions, some of which are addressed by the updated Guidance.

For the purposes of determining whether an arrangement where the first step was implemented between 25 June 2018 and 31 December 2020 qualifies as a reportable cross-border arrangement under the Directive, the Guidance clarifies that intermediaries and relevant taxpayers can rely on the analysis carried out on the premise that the UK was an EU Member State during the period in question. In other words, there is no requirement for intermediaries and relevant taxpayers to redo an analysis previously carried out considering the UK this time as a third state for arrangements where the first step was implemented during the aforementioned period. For completeness, our understanding is that the same applies to the other triggering events for the deferral period.

When determining whether an arrangement triggers a reporting or notification obligation in Luxembourg as of 1 January 2021, the UK is to be considered as a third State. This holds true also for cross-border arrangements where the first step was implemented between 25 June 2018 and 31 December 2020, or for arrangements that would be reported in the UK pursuant to a legal basis other than the Directive.

From a technical point of view, when declaring a cross-border arrangement, the UK should not be indicated as a concerned Member State.

Concept of participant in an arrangement

According to the Guidance, the concept of participant in an arrangement does not only cover relevant taxpayers, but also their business or contractual partners with respect to the arrangement in question. For example, the buyer or seller of a property, the tenant or owner of an economic property, lessors or lessees, as well as lenders or borrowers would be participants in an arrangement.

Marketable arrangements

The Guidance specifies that an arrangement is reportable as a marketable arrangement when regular updates, particularly the addition of relevant taxpayers, are contemplated. The Guidance further clarifies that an arrangement that contains hallmark A.3., i.e., an arrangement that has substantially standardized documentation and/or structure and is available to more than one relevant taxpayer without the need to be substantially customized for implementation, does not automatically constitute a marketable arrangement.

Items related to the reporting process

When the reporting person is not aware of an item of information that is not mandatory for the report, the Guidance recommends that the respective field not be filled in.

With respect to the details to be provided of the national provisions that form the basis of the reportable cross-border arrangement, while it is not necessary to reproduce the legal provisions, the Guidance specifies that the reporting person must indicate the relevant domestic legislation of all the countries concerned on which the arrangement is based and of which he/she is aware.


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

Ernst & Young Tax Advisory Services Sàrl, Luxembourg City 

Ernst & Young LLP, Luxembourg Tax Desk, New York 

Ernst & Young LLP, Luxembourg Tax Desk, Chicago 



  1. See EY Global Tax Alert, UK Government announces approach to UK MDR post UK-EU Brexit Agreement, dated 5 January 2021.

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 Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more