LUXEMBOURG Law and Practice Contributed by: Romain Tiffon and Marie Bentley, ATOZ Tax Advisers
• Action 5 – revised intellectual property (IP) box regime; • Action 6 – treaty anti‑abuse measures; • Actions 8–10 – strengthened transfer pricing rules aligned with OECD guidance; • Action 13 – country‑by‑country reporting (CbCR); and • Action 15 – implementation of the Multilateral Instrument (MLI). 9.2 Government Policy and Objectives Approach Luxembourg has consistently demonstrated its com - mitment to curbing harmful tax practices and fully supports the OECD BEPS initiative, which forms the basis for ATAD 1, ATAD 2 and the Multilateral Instru - ment (MLI). In line with international developments, Luxembourg transposed the EU Pillar Two Directive on global mini - mum taxation in December 2023. As a result, Pillar Two is now in force, with the Income Inclusion Rule (IIR) and the Luxembourg Qualified Domestic Mini - mum Top‑Up Tax (QDMTT) applying for fiscal years beginning on or after 31 December 2023, and the Undertaxed Profits Rule (UTPR) applying for fiscal years beginning on or after 31 December 2024. The Luxembourg legislator has also integrated the OECD administrative guidance on Pillar Two. Lux - embourg treats both existing and future OECD guid - ance as a relevant interpretative source for applying the rules, and incorporates additional guidance into domestic law where appropriate. On 17 December 2025, the Luxembourg Parliament enacted the law on the exchange of information with respect to “top-up tax information return” or GloBE Information Return (GIR), which transposes Direc - tive (EU) 2025/872, also called DAC9. The DAC9 Law amends the law of 22 December 2023 (the “Pillar Two Law”) implementing Directive (EU) 2022/2523 on ensuring a global minimum level of taxation for multi - national enterprise groups and large-scale domestic groups in the European Union (the “Pillar Two Direc - tive”). The newly adopted DAC9 law aims to facilitate compliance with the filing obligations of companies
under the Pillar Two Directive and to align Luxembourg rules with recent OECD Administrative Guidance. In principle, the GIR must be filed with the Luxembourg direct tax authorities no later than 15 months after the last day of the reportable fiscal year. Notwithstanding this principle, during the transitional period, the dead - line for submitting the returns has been extended and the first Luxembourg GIR will be due by 30 June 2026. Pillar One has not yet been implemented in Luxem - bourg. Luxembourg, like most EU member states, supports an eventual multilateral solution but will only proceed once there is an agreed international legal instrument. 9.3 International Tax International tax remains highly visible in Luxembourg due to the EU Code of Conduct processes, the OECD BEPS monitoring, periodic political debates about “tax fairness”, and the historical LuxLeaks context. This visibility has reinforced Luxembourg’s commit - ment to rigorous implementation of BEPS and EU tax directives. Luxembourg is now fully aligned with OECD and EU international tax reforms, including BEPS, ATAD 1 and 2, the MLI, and the global mini - mum tax (Pillar Two). The government publicly posi - tions Luxembourg as a co-operative, transparent and compliant jurisdiction and has consistently rejected the notion of harmful tax competition. The objective is to preserve Luxembourg’s competitiveness while ensuring compliance with global standards in order to avoid blacklisting, safeguard treaty networks and maintain investor confidence. 9.4 Competitive Tax Policy Objectives Luxembourg balances competitiveness with compli - ance by maintaining flexible, business-friendly regula - tions and administrative procedures and by preserving the favourable tax regimes, the arm’s length principles
and predictable administrative practices. 9.5 The Competitive Tax System
Luxembourg offers a stable, competitive and inter - nationally compliant tax framework. However, certain features of its system are inherently more exposed
291 CHAMBERS.COM
Powered by FlippingBook