On 28 March, a new was presented to parliament to amend the Luxembourg General Tax Law and introduce new procedures that are applicable to taxpayers. The bill seeks to simplify and modernise rules governing the tax procedure in Luxembourg, some of which haven’t been updated since the 1930s and are widely viewed as obsolete.
Henaff welcomed the draft law and said that while some provisions in the bill, such as advanced agreements for transfer pricing, is good news and will bring greater certainty to taxpayers, others “clearly lack ambition” and do not go far enough to modernise Luxembourg’s tax system.
For example, the draft bill proposes a new time limit for appeals before the Administrative Tribunal in the event of silence from the director of the Luxembourg Tax Administration. Currently, if no decision is taken by the tax authority within the first six months, there is no time limit for taxpayers to appeal in front of the tribunal. However, under the new proposals taxpayers will only be able to make an appeal 12 months after the six-month period of silence from the director of the LTA.
Henaff claims that rather than increase certainty for taxpayers, the measure primarily seek to ease the administrative burden on the tax authorities. “The goal is to reduce the number of potential cases the tax authorities have to deal with and increase the obligations to taxpayers. The tax administration can basically not answer to a tax claim without adverse consequences,” he said during an interview with Delano.
“Conversely, if the taxpayer does not react within a certain deadline to the tax authority’s inaction, they lose their right to file an appeal in front of the administrative tribunal, which diminishes taxpayer rights,” Henaff added.
The bill was by finance minister (DP) and is pending an opinion from the state council.
The Ministry of Finance was approached for comment and none was provided before the publication date.