Luxembourg releases paper on tax transparency amid “Lux leaks” controversy

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Luxembourg releases paper on tax transparency amid “Lux leaks” controversy

On December 10 the Luxembourg Ministry of Finance released proposals relating to tax transparency and advance rulings. This move comes as no surprise in the light of the recent “Lux leaks” scandal and appears to be a strategic attempt at advertising Luxembourg’s willingness to fight tax evasion.

The position paper outlines that:

· A specific provision would be added to the tax law regarding transfer pricing documentation;

· From 2015, the tax administration would provide an annual report of all tax ruling issues for the year;

· The income tax law of Luxembourg would be modified to explicitly state that profit of related-party enterprises would be determined under an arm’s-length standard and then taxed according to OECD principles; and

· Requests for corporate tax rulings, filed with the tax office, would have to be submitted to the newly established supervisory commission (commission des decisions anticipées) which is authorised to issue a binding opinion on which the tax office’s advance ruling would be based.

According to the paper, these legislative changes, which are already considered administrative practice by the Luxembourg tax office, would be codified into law.

Perfect timing

There is no denying that the proposals were released in response to the “Lux leaks” scandal.

“The form and timing of the release was expected in the context of the recent “Lux leaks”. It is a move to clarify Luxembourg’s position that there should be more transparency around rulings,” said Keith O’Donnell of Atoz.

The proposals will come as no surprise to taxpayers who were already expecting significant changes to improve tax transparency in the country. The release of the proposals appears to be more of a publicity stunt to reassure the international tax community that Luxembourg is fully committed to tackling the fight against base erosion and profit shifting.

more across site & shared bottom lb ros

More from across our site

Consoli, a tax partner at Brazilian law firm Martinelli Advogados, tells ITR about the importance of staying at the coalface and constantly learning
Despite legislative gridlock, international investors should be wary of legal precedents set by recent court rulings, which could substantially alter the Spanish tax environment
The new outfit, Ashurst Perkins Coie, will bring together around 3,000 lawyers across 23 countries
As World Tax unveils its much-anticipated rankings for 2026, we highlight the two Brazilian firms that had a standout year of tier promotions
ITR understands that UK Chancellor Rachel Reeves will announce a consultation on the proposed financial reward scheme, which had left advisers fretting
The long-running dispute centres on Medtronic’s use of the comparable uncontrolled transaction TP method; in other news, Paul Hastings and FTI Consulting both made double tax hires
The boutique Australian firm’s TP award recognition proves that world-class advisory services aren’t limited to the ‘big four’, the firm’s founder tells ITR
Canadian and Indian dual VAT models have been a source of inspiration for the Brazilian model, but the latter has unique and innovative features, the OECD paper claimed
More sophisticated use of technology, heightened TP scrutiny and stricter filing requirements are making South African Revenue Service audits a formidable challenge
The hire of Doug Wick expands Baker McKenzie’s state and local tax practice and adds to the firm’s growing ex-IRS expertise
Gift this article