LUXEMBOURG Law and Practice Contributed by: Nathalie Prüm-Carré, Inès Goeminne and Georges Gratia, Elvinger Hoss Prussen
6.2 Environmental Taxes Environmental taxation is based on several tax bases. According to the System of Environmental-Economic Accounting (SEEA), Luxembourg taxes that are con- sidered as environmental include: • excise duties on mineral oils; • autonomous excise duties on certain mineral oils; • the supplementary tax levied on fuels; • “Kyoto” excise duties (CO2 tax); • the tax on motor vehicles charged to households; • the tax on motor vehicles charged to businesses; • emission credits; and • the water abstraction tax. 6.3 Incentives, Exemptions and Penalties Luxembourg actively supports undertakings commit- ted to the ecological transition. Undertakings carrying out ecological and energy transition projects can ben- efit from tax relief, calculated on the basis of invest- ments and operating expenses incurred as part of an ecological and energy transition project. Environmental incentives for citizens also involve a system of financial aid. For example, the “Klimabo- nus” programme provides financial assistance to citi- zens for housing and mobility, with the aim of mak- ing homes more energy-efficient and facilitating the choice of emission-free mobility solutions. In Luxembourg, the House of Sustainability plays a central role as a co-ordination platform for sustain- able development, offering undertakings and indi- viduals centralised access to all existing financial aid schemes (“Fit4 Sustainability”, bonus for the purchase of an electric vehicle, Klimabonus, investment aid for environmental protection, etc). As a general rule, administrative or criminal sanctions only apply when a citizen or company fails to comply with environmental laws or regulations. 6.4 Shareholder or Parent Company Liability Under Luxembourg environmental legislation, there is currently no specific scheme under which a share- holder or parent company can be held directly liable for environmental damage caused by a company.
6.5 ESG Requirements Environmental disclosures became mandatory in Lux- embourg pursuant to the Law of 23 July 2016, which transposed the Non-Financial Reporting Directive (NFRD) (“NFRD Law”) through amendments to vari- ous laws. Those provisions are in the process of being amended through Bill 8370 (“CSRD Bill”), transpos- ing the Corporate Sustainability Reporting Directive (CSRD). In accordance with the NFRD Law, large undertak- ings that are public-interest entities (listed entities, credit institutions, insurance companies) and exceed the average number of 500 employees are currently required to disclose the information necessary for understanding the undertaking’s development, per- formance and position, and the impact of its activity, relating to environmental, social and employee mat- ters, respect for human rights, anti-corruption and bribery matters, including the principal risks related to those matters linked to the undertaking’s operations. It is to be noted that the CSRD framework further details those obligations, particularly with respect to climate financial impacts and risks and opportunities, by reference to the detailed European Sustainability Reporting Standards (ESRS). The Commission de Surveillance du Secteur Financier has jurisdiction to monitor sustainability information. 6.6 Environmental Audits In Luxembourg, several forms of environmental audit are carried out in the context of different transactions, such as energy audits, environmental assessments, verification of compliance with administrative author- isations and technical inspections. Some of these forms of audit may be made compulsory, depend- ing on the applicable legislation or the administra- tive authorisations in question. For example, certain undertakings are required to carry out an energy audit, which must be carried out independently by qualified experts, in accordance with the provisions of the Law of 5 August 1993 on the rational use of energy, as amended.
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