Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2025

Luxembourg

Luxembourg joined the Global Forum in 2009. It underwent its Second Round of EOIR Peer Review in 2019 (Luxembourg’s 2019 Report),1 which assessed its legal and regulatory framework in force as at December 2018 and its practical implementation, including in respect of EOI requests received and sent during the review period from 1 October 2014 to 30 September 2017. Luxembourg received an overall rating of Largely Compliant and the individual Elements were rated as follows:

 

	A.1	A.2	A.3	B.1	B.2	C.1	C.2	C.3	C.4	C.5	Overall
Determinations	i.p.b.	i.p.	i.p.	i.p.	i.p.b.	i.p.	i.p.	i.p.	i.p.	n.a.	LC
Ratings	LC	C	C	C	LC	C	C	C	C	LC

Status of implementation of recommendations issued in the peer review report

Luxembourg received 4 in-box recommendations in relation to Elements A.1, B.2 and C.5 and it received 12 in-text recommendations in relation to Elements A.1, A.3, C.1, C.2, C.3 and C.5.

This monitoring report assesses the actions taken by Luxembourg to address the recommendations issued in its EOIR Peer Review Report and the peer input received for the monitoring period 2023-2024.

The report concludes that the four in-box recommendations are “considered addressed in the context of the monitoring process (subject to a peer review)” but a new recommendation is added since the implementation and enforcement in practice of the legal and regulatory changes, taken to address an in-box recommendation by introducing the beneficial ownership register, are yet to be fully ascertained. The report also concludes that 10 out of 12 in-text recommendations issued to Luxembourg are “considered addressed in the context of the monitoring process (subject to a peer review)”, while 2 in-text recommendations are “in the process of being addressed”. The report advises on actions required.

Element A.1: Availability of ownership and identity information

1. Coverage of the requirements on beneficial ownership information

 

Recommendation (A.1, framework)	Luxembourg should ensure that information about beneficial owners of Luxembourg stock companies and partnerships is available in all cases.
Underlying factor	Although Luxembourg financial institutions and other professionals subject to the AML/CFT framework must identify beneficial owners of their clients, not all Luxembourg stock companies and partnerships are obliged to maintain a relationship with a Luxembourg AML-obliged person. (see paragraph 66 et seq. of Luxembourg’s 2019 Report for more information)
Summary of actions reported	Luxembourg focused on the implementation of the Beneficial Ownership Register, set up in 2019, to address this recommendation. This Register provides for adequate, accurate and up-to-date beneficial ownership information. Relevant guidance has been issued by the Luxembourg Business Registrar, in charge of maintaining the Beneficial Ownership Register. Luxembourg authorities also carried out awareness raising activities and enforcement measures, which helped to reach the filing rate of 94% as of December 2024. Regarding the supervision of the accuracy, adequacy and update of the information contained in the Register, the Luxembourg authorities have relied on checks made at the registration of the information and on the obligation of AML-obliged persons to report discrepancies between the information they hold on file and the information in the Register while performing the due diligence review, identifying and verifying their customers’ identity and the identity of their customer’s beneficial owner. This obligation is implemented in practice and properly supervised by the AML supervisory authorities. The same obligation of reporting discrepancies applies to the public authorities having access to the Beneficial Ownership Register. The law setting up the Beneficial Ownership Register has been recently amended, in January 2025, to enhance the oversight and enforcement powers of the Luxembourg Business Registrar. These amendments allow the Registrar to apply administrative sanctions, to require updates from the entities and to amend irregularities. The Luxembourg authorities also removed the inactive entities from the Register, after 10 years of non-filing at the Business Register. These inactive entities can be dissolved through the procedure for administrative dissolution without liquidation.
Conclusion	Luxembourg has taken comprehensive actions to address the legal issue regarding the coverage of beneficial ownership obligations, with the introduction of an obligation for all relevant entities to file their beneficial ownership information with the Business Registrar. Although the entities must update this information within 30 days of a change, there is no obligation for them to periodically review it. Nevertheless, the obligation of the beneficial owner to inform the legal entity of any change is a legal mechanism to make the entity aware of the relevant changes. The beneficial ownership Register has been operationalised at an appropriate level and a supervision has been implemented, mainly though checks at the registration of the data and the discrepancy reports received. However, the discrepancy reporting mechanism may not cover all relevant entities as not all entities are obliged to maintain a relationship with a Luxembourg AML-obliged person or to interact with a public authority with access to the beneficial ownership Register. The new enforcement powers, in force since early 2025, have not yet been implemented in practice. More information should be provided on the results of these new enforcement powers. Luxembourg is expected to report progress on the implementation of the changes in the legal and regulatory framework under a new recommendation. Luxembourg is recommended to continue its activities of supervision in view to ensure that the beneficial ownership information held in the Beneficial Ownership Register is accurate, adequate and up to date for all relevant entities, in line with the standard.
Status determined	Existing recommendation: Considered addressed in the context of the monitoring process (subject to a peer review) New recommendation issued.
Actions required	Existing recommendation: No immediate action required. New recommendation: In its next self-assessment, Luxembourg should report actions and supporting implementation details taken to enforce changes to the legal and regulatory framework, in particular to ensure that the information contained in the Beneficial Ownership Register is accurate, adequate and up to date for all entities.

2. Supervision of AML obligations of some professionals

 

Recommendation (A.1, practice)	It is recommended that the Indirect Tax Administration continue the effective implementation of its Non-Financial Professions Supervision Programme.
Underlying factor	Since 2011, the Indirect Tax Administration has been responsible for overseeing certain non-financial professions (accountants, tax advisors, and corporate and trust service providers). Since 2016, the Indirect Tax Administration has developed an appropriate prevention and supervision plan. (see paragraph 94 et seq. of Luxembourg’s 2019 Report for more information)
Summary of actions reported	The Indirect Tax Administration has properly implemented its AML supervision programme. It has conducted off-site and on-site inspections and has issued appropriate sanctions when needed, including for failure by the relevant professionals to comply with the beneficial ownership requirements of their customer due diligence. It has also provided relevant guidance to the professionals on their AML obligations, including on the definition of beneficial owners. Consequently, its organisation and resources seem appropriate to conduct the AML supervision of the relevant professionals.
Conclusion	Luxembourg has taken comprehensive actions to address the recommendation and is no longer required to report. The information provided by Luxembourg on the number of inspections and sanctions applied during the past years demonstrates that it has continued the effective implementation of its supervision programme.
Status determined	Considered addressed in the context of the monitoring process (subject to a peer review)
Actions required	No immediate action required.

Element B.2: Notification and appeals

3. Ensuring that appeal rights do not unduly prevent or delay effective EOIR

 

Recommendation (B.2, framework)	It is recommended that Luxembourg adapt its domestic law to take account of the Berlioz judgement to ensure that information can be effectively exchanged in practice.
Underlying factor	Since the European Court of Justice’s Berlioz judgement, at least 37 appeals have been brought before the administrative court to challenge the legality of the injunction decision notified to the information holders. As at 19 December 2018, 34 appeals are still pending before the administrative court, generating major delays in the exchange of information in the cases concerned. These appeals cast uncertainties over the consequences of the Berlioz judgement for Luxembourg’s domestic law. (see paragraph 252 et seq. of Luxembourg’s 2019 Report for more information)
Summary of actions reported	Luxembourg amended its legal framework to introduce the right for the information holder to file an action for annulment of the injunction letter (notice for requesting information). This judicial procedure is limited to 90 days maximum to ensure that it does not unduly prevent or delay EOI, despite its suspensive effect. In case of appeal, specific timeline also applies. Although the timeliness of answers is longer when an action for annulment has been introduced, 75% of those cases have been closed within a year and status updates have been sent to inform the partner about the status of the request. No adverse peer input was received in this respect.
Conclusion	Luxembourg has taken comprehensive actions to address the recommendation and is no longer required to report. Luxembourg has taken the relevant measures to adapt its domestic law to comply with the European Court of Justice’s judgement. It has closely monitored the concerned EOI cases for which action for annulment had been introduced and timeliness of answers to these cases. Since no adverse peer input was received in this respect, it can be concluded that the procedure of the action for annulment has no adverse consequence on the effectiveness of the EOI by Luxembourg.
Status determined	Considered addressed in the context of the monitoring process (subject to a peer review)
Actions required	No immediate action required.

Element C.5: Effective exchange of information

4. Timeliness of answers

 

Recommendation (C.5, practice)	It is recommended that Luxembourg continue to improve the timeliness of responses and ensure that adequate resources are allocated to the EOI activities.
Underlying factor	Even though Luxembourg has increased staff numbers during the peer review period, these resources were not sufficient to cope with the substantial increase in the number of EOI requests received from its partners. The EOI team was organised to provide maximum efficiency, but the timeliness of response was inevitably affected by the lack of staff.
Summary of actions reported	Luxembourg reported significant improvements in the EOIR statistics since the period under review in the Luxembourg’s 2019 Report (1 October 2014 – 31 September 2017). The response rate within 90 days increased from 25% to 79%, the response rate within 180 days increased from 64% to 97% and the response rate within a year increased from 84% to 99%. Luxembourg provided a status update in all cases where a final answer was not provided within 90 days. Positive peer input has been received since 2021 on the EOI by Luxembourg.
Conclusion	Luxembourg has taken comprehensive actions to address the recommendation. The timeliness of answers to EOI requests received by Luxembourg during the monitored period and the systematic sending of the status update confirmed the effectiveness of EOI by this jurisdiction.
Status determined	Considered addressed in the context of the monitoring process (subject to a peer review)
Actions required	In its next self-assessment, Luxembourg should provide updated timeliness statistics for the corresponding monitoring period, according to paragraph 53 of the Enhanced Monitoring Methodology.

EOIR experience

Over the monitoring period 2023-2024, Luxembourg received 1 768 requests and sent 203 requests. France, Poland and Spain were the top three partners in respect of incoming requests. Germany, Belgium and France were the key partners in respect of outgoing requests. Luxembourg reported providing full and final responses in 99% of all the received requests and indicated 2 pending requests.

17 peers provided input on their cooperation with Luxembourg during the monitored period. This input reflects a general satisfaction of the EOI provided by Luxembourg and does not raise any specific issue.

New developments having a bearing on the EOIR standard

Luxembourg has reported a recent decision of the European Court of Justice (case C-432/23, dated 26 September 2024) that could have a bearing on EOIR. In this decision, the European Court of Justice confirms that a legal advice falls within the scope of legal privilege, whatever the matter of the legal advice and cannot be accessed by the tax authority for purposes of applying the European directive on administrative cooperation in the field of taxation, which is an EOI instrument among the European Member States. Consequently, it considers a Luxembourg domestic provision (Article 177(2), General Tax Law), as applied in the case at hand, as not compatible with the European rules, since this provision allowed to waive the professional secrecy of lawyers for the tax administration “in respect of facts of which they became aware in connection with advice or representation in tax matters”.

Although limiting the access powers of Luxembourg as regards information held by lawyers, this decision of the European Court of Justice does not depart from the standard regarding the scope of legal privilege. Nevertheless, Luxembourg should report on this matter in its next self-assessment.

Next steps

Luxembourg should continue taking actions towards implementing the standard effectively.

Under the first round of enhanced monitoring, a new recommendation is issued to Luxembourg

5. Ensuring the accuracy, adequacy and update of the information contained in the beneficial ownership Register

 

Recommendation (A.1, practice)

Luxembourg is recommended to continue its activities of supervision in view to ensure that the beneficial ownership information held in the Beneficial Ownership Register is accurate, adequate and up to date for all relevant entities, in line with the standard.

Underlying factor

Luxembourg has introduced a Beneficial Ownership Register in 2019. Luxembourg authorities took incentives and enforcement measures, which helped to reach the filing rate of 94% as of December 2024. Regarding the supervision of the accuracy, adequacy and update of the information contained in the Register, the Luxembourg authorities have relied on the checks at the registration of the data as well as on the obligation of AML-obliged persons and public authorities having access to the information in the Beneficial Ownership Register to report discrepancies between the information they have and the information in the Register. For the AML-obliged persons, this obligation is implemented and properly supervised by the AML supervisory authorities in practice. Nevertheless, the discrepancy reporting by AML-obliged persons may not cover all relevant entities since there is no obligation for these entities to engage in a business relationship with such a person or to interact with a public authority with access to the Beneficial Ownership Register. This would represent in practice a maximum of 5% of entities, the other entities having a bank account in Luxembourg. The law setting up the Beneficial Ownership Register has been amended, in January 2025, to enhance the oversight and enforcement powers of the Luxembourg Business Registrar. These amendments are recent and have not yet been tested in practice.

The following next steps are expected from Luxembourg:

• Luxembourg is exempted from reporting on the in-box recommendations and ten in-text recommendations made in the 2019 Report of Luxembourg that are “considered addressed in the context of the monitoring process, subject to a peer review’’.

• Luxembourg should nevertheless submit its next self-assessment in 2028 under the second round of enhanced monitoring to

  • Report on the actions taken to address the new recommendation issued and on the two in-text recommendations considered as “in the process of being addressed”.

  • Report statistical information on its EOIR experience during the monitoring period.

  • Report on any other matter having a bearing on the EOIR standard when specifically requested.

• Further, Luxembourg’s response on any issues with broader implications on compliance with the standard, raised in peer input, will continue to be sought under the enhanced monitoring process.

• Luxembourg must report actions to address any future recommendations pertaining to the EOIR standard that may be issued to it under the Global Forum’s monitoring and review processes.

Views/response of the monitored jurisdiction

Luxembourg would like to express its appreciation and thanks to the Global Forum Secretariat for the preparation of the report, for their professionalism, flexibility and availability during the whole process. Luxembourg thanks also the Assessment Panel for their detailed consideration and the Peer Review Monitoring Group members for their efforts and insightful comments that have helped to improve the quality of our report.

Consistent with the conclusions of the report, Luxembourg is pleased, that they fairly reflect progress made by Luxembourg since its last assessment in 2019. Luxembourg recognises that there are opportunities through which the availability of beneficial ownership information can be further strengthened in light of the evolving requirements of the international standard of the exchange of information on request.

Luxembourg thanks the Global Forum Secretariat and PRMG for this report.

Note

← 1.  OECD (2019), Global Forum on Transparency and Exchange of Information for Tax Purposes: Luxembourg 2019 (Second Round): Peer Review Report on the Exchange of Information on Request, Global Forum on Transparency and Exchange of Information for Tax Purposes, OECD Publishing, Paris, https://doi.org/10.1787/7ba732bf-en.