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

August 9, 2023
2023-1378

Luxembourg enacts legislation introducing public country-by-country reporting for multinational enterprises

  • The Luxembourg Parliament recently approved the law implementing the European Union (EU) public country-by-country reporting (CbCR) Directive into domestic legislation.
  • The new reporting obligations will apply to financial years starting on or after 22 June 2024.
  • Board members are responsible for properly implementing the new rules.

On 19 July 2023, the Luxembourg Parliament adopted the law (Law) transposing the public CbCR Directive (Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021 amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches). For more information on the Law, see EY Global Tax Alert, Luxembourg submits draft legislation introducing public country-by-country reporting for multinational enterprises, 22 March 2023.

The rules set forth in the Directive require both multinational enterprises (MNEs) based in the EU, and non-EU- based MNEs doing business in the EU through a branch or subsidiary with a total consolidated revenue exceeding €750 million in each of the last two financial years, to publicly disclose the income taxes paid and certain other information, such as a breakdown of profits, revenues and employees per country.

The obligation of drawing up, publishing and making accessible the public CbCR applies to financial years starting on or after 22 June 2024. For undertakings with a calendar financial year, the reporting obligation will apply for the first time to financial year 2025. The report must be lodged in the Luxembourg Trade and Companies Register (Registre de commerce et des Sociétés), and information about this filing must be published in the Luxembourg Electronic Compendium of Companies and Associations (Recueil électronique des Sociétés et associations) and on the website of the undertaking during calendar year 2026.

The new reporting obligations will have a significant impact on in-scope MNEs. Compliance with the obligations will largely depend on the availability and quality of the information to be disclosed. As a result, a timely review and possibly adaptation of data capture processes will be required. Compliance with the new reporting rules is of particular relevance for board members, given that the members of administrative, management and supervisory bodies are held responsible for noncompliance, which can result in fines of between €500 and €25,000.

———————————————

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

Ernst & Young Tax Advisory Services S.à r.l.

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 
 

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