The ACD tax agency delivered 36 pre-emptive tax opinions in 2023, compared to 67 in 2022 and 84 in 2021. That was down by 33% year-on-year and down by nearly half compared to 2021.

The decrease tracked a significant drop in the overall number of advance tax decisions compared to a decade ago. The total volume dropped by 90% between 2015 and 2020.

The ratio of positive replies to taxpayer requests was 86% in 2023, compared to 69% in both 2021 and 2022. But the figure was similar to the 2015-2017 average, when ACD granted 83%-85% of advance tax decision requests. 

There are two types of advance tax decisions: advance tax rulings, written confirmation of how tax law will be applied to a taxpayer’s specific case, and advance price agreements, how transactions between different parts of a multinational corporation will be treated.

Companies and wealthy individuals seek the opinions before striking a deal to ensure they have correctly calculated the tax consequences of the arrangement. Comfort letters have been criticised by campaigners for being distortive and often unfair, and by the European Commission, which has said they sometimes amount to unlawful state aid. 

Luxembourg’s finance ministry released the figures on 4 March 2024 in an to its 2023 annual activity report.