On 11 March 2021, the Luxembourg Tax Authorities has issued Circular L.G. – Conv. D.I. n° 60 regarding the updated mutual agreement procedure (MAP) guidance. The Circular replaces previous Circular L.G. Conv. D.I. No. 60 of 28 August 2017. The updated guidance provides methods of implementing the amicable procedure under the bilateral tax treaties concluded by Luxembourg. The guidance is based on Article 25 of the OECD Model Tax Convention.
The guidance clarifies the terms of application of the MAP, initiation of the MAP, conduct of the amicable procedure, closure of the amicable procedure, conditions for implementing a solution proposed to the taxpayer, interest and penalties, suspension of recovery procedures, mutual agreement procedure concerning the interpretation or application of a tax treaty, elimination of double taxation in cases not provided for in a tax treaty, arbitration etc.
Moreover, the guidance does not cover proceedings under article 3 of the Law of 20 December 2019, which transposes Council Directive (EU) 2017/1852.
