On 30 June 2023, the Luxembourg Tax Authority updated the frequently asked questions (FAQs) concerning the mandatory disclosure and exchange of cross-border tax arrangements (DAC6). The latest update clarifies the following measures:

  • Notification obligation and Legal professional privilege;
  • Hallmark C1.a: Where deductible cross-border payments occur between two or more associated enterprises, and the recipient does not have tax residency in any tax jurisdiction;
  • Hallmark C1.d: Where deductible cross-border payments take place between two or more associated enterprises, and the payment receives advantages from a preferential tax regime in the jurisdiction where the recipient holds tax residency; and
  • Hallmark E3: Transfer of assets, risks, and functions within a single group across borders, which directly affects the company’s EBIT (earnings before interest and taxes).