On 28 March 2014, the governments of Luxembourg and the United States have signed an intergovernmental agreement ("IGA") on the implementation of the Foreign Account Tax Compliance Act ("FATCA") in Luxembourg. The IGA aims at facilitating the exchange of information on Specified US Persons, as defined by FATCA, by Luxembourg to the United States, while at the same time easing the compliance obligations for, amongst others, Luxembourg financial institutions by specifying local exemptions and deemed compliant classifications with no reporting duties. As Luxembourg has opted for and has negotiated a so-called Model 1 IGA with the United States, the exchange of information by Luxembourg financial institutions ("FIs") to the United States Internal Revenue Service ("IRS") will take place indirectly via the Luxembourg tax authorities, who will in a first step gather the relevant FATCA information on the identity of, as well as, the amounts owned and the income received by US Persons from Luxembourg financial institutions and will then pass such information on in an automatic manner to the IRS. There will be no duty for Luxembourg FIs to directly communicate information on their clients to the IRS. This Newsflash outlines the main features and mechanisms of the IGA, explains the requirements for relying on the deemed-compliant categories, in particular for investment funds, and indicates the next steps to be taken by Luxembourg FIs in order to prepare for the entry into force of FATCA. To download the document click on the link below

Contacts

Thierry Lesage

Thierry Lesage is a Partner in the Tax Law practice of Arendt & Medernach. He advises on both national and international tax issues. He is active on private equity, real estate and finance transactions. He is a member of the Luxembourg Bar, the American Bar Association, the International Bar Association and the International Fiscal Association where he was appointed as national co-reporter for the 2003, 2005 and 2014 Congresses. Moreover, he is Vice-Chair of the fiscal commission of the Luxembourg Bankers' Association. Prior to joining Arendt & Medernach, he worked as a tax manager with one of the Big Four firms and as head of the corporate tax department with a bank in Luxembourg. Thierry L...

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