Exchange of information in tax matters upon request: relevant CJEU decision

2 mn

On 6 October 2020, the Court of Justice of the European Union (CJEU) rendered its judgement in Joined Cases C-245/19 Luxembourg State v B and C-246/19 Luxembourg State v B and Others in the context of the exchange of information in tax matters.

In this decision, the Court considered two references for preliminary ruling made by the Luxembourg Administrative Court. The most important points from these decisions can be summarised as follows:


1. Where a request for exchange of information in tax matters is received by the Luxembourg tax authorities from the competent authority of another Member State, and the Luxembourg tax authorities subsequently order an information holder to communicate information for the purposes of this exchange, the information holder should have the possibility to file a claim with the Luxembourg courts against the information order. The information holder must, in this sense, be granted the benefit of the right to an effective remedy guaranteed by Article 47 of the Charter of Fundamental Rights.


2. The Court added that the taxpayer need not be given access to a direct remedy against an information order if other remedies before the various competent national courts or tribunals are available which would enable the taxpayer to obtain, in an incidental manner, an effective judicial review of the order measure. One such remedy could be a right of appeal against a correction decision or adjustment decision adopted following the investigation that gave rise to the request for exchange of information. As such, legislation preventing a taxpayer from bringing a direct action against an information order does not damage the essence of the right to an effective remedy.


3. Similarly, the exercise of the right to an effective remedy that must be available to third parties concerned (i.e. parties other than the information holder or the taxpayer and with whom the taxpayer maintains legal, banking, financial or other economic relationships) may be limited by national legislation which excludes the third parties’ bringing a direct action against the order made by the tax authorities to the information holder, provided that such third parties have an alternative remedy enabling them to obtain effective respect of their fundamental rights. One such remedy could be an action to establish liability.


4. Finally, the Court provided guidance on what constitutes “foreseeably relevant” information within the meaning of Directive 2011/16.1 According to the CJEU, the identity of the person holding the information in question, the identity of the taxpayer subject to the investigation giving rise to the request for exchange of information, as well as the period covered by that investigation are all foreseeably relevant information. Furthermore, information relating to contracts, invoices and payments which, although not expressly identified, are defined by personal, temporal and material criteria establishing their links with the investigation and the taxpayer subject to that investigation, all qualify as foreseeably relevant information. This combination of criteria is sufficient to consider that the information requested is not manifestly devoid of any foreseeable relevance, such that a more precise definition of the information is not necessary.


Concluding remarks


It will now be for the Luxembourg courts to dispose of the case in accordance with the CJEU’s guidance. We will continue monitoring these developments and provide you with the latest insights and thought leadership.


How can we help?

The Tax Law partners and your usual contacts at Arendt & Medernach are at your disposal to further assess and advise on the impact of this new development on your tax affairs.


1 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC.

Download the press release

2020.10.09 – Luxembourg Newsflash – Exchange of information in tax matters upon request

pdf146 KB