Luxembourg's updated Pillar Two FAQs clarify the treatment of adjusted covered taxes, expand registration obligations for in-scope entities and set out notification requirements for GloBE Information Return filings, while also providing further guidance on transitional measures.
The Luxembourg Administration of Direct Tax (ACD) has released an updated Frequently Asked Questions (FAQs) document on the Pillar Two global minimum tax rules introduced under the Law of 22 December 2023 (the Pillar Two Law), providing further guidance on registration obligations, GloBE Information Return (GIR) notifications, and transitional provisions.
The revised guidance, published on 4 June 2026, adds new questions relating to the registration requirements under Article 49 and the notification obligations for GIR filing under Article 50. It also clarifies the treatment of covered taxes and the application of transitional measures.
Clarification on adjusted covered taxes
Under Article 25, concerning the calculation of Adjusted Covered Taxes, the ACD said it will issue tax assessments to enable taxpayers to pay covered taxes within three years following the end of the relevant fiscal year, provided the corresponding tax returns are submitted on time. As a result, these taxes should not be treated as reductions of covered taxes for a Constituent Entity under Article 21(3)(e) of the Pillar Two Law.
Registration obligations expanded
The guidance expands on registration obligations for entities within the scope of the legislation. According to the ACD, every Constituent Entity, Joint Venture and Joint Venture Affiliate located in Luxembourg must register with the tax authority, regardless of whether a safe harbour applies or whether reporting obligations exist under Articles 50 and 51.
The registration requirement also extends to investment entities located in Luxembourg and to individual compartments of multi-compartment legal structures. These compartments must obtain a Luxembourg tax identification number (NIF) from the office responsible for withholding tax on interest income. The identifier is intended exclusively for Pillar Two procedures, including registration and the filing of top-up tax information returns and top-up tax returns.
The ACD clarified that stateless entities are not required to register because they are not regarded as being located in Luxembourg for the purposes of the law.
The FAQs also address situations involving the creation and dissolution of entities. Registration and deregistration remain mandatory even where an entity is established and dissolved during the same reporting fiscal year. For the Transition Year, however, the ACD introduced an administrative concession allowing deregistration to be completed within 18 months after the end of the fiscal year.
In addition, entities that change membership of a Multinational Enterprise (MNE) Group or a Large-Scale Domestic Group during a fiscal year must first deregister before submitting a new registration.
GIR notification requirements
Regarding GIR filing obligations, the ACD stated that where an entity is exempt from filing a top-up tax information return in Luxembourg, it, or its designated local entity, must notify the tax authority of the identity and jurisdiction of the entity responsible for filing the return.
The guidance also introduces temporary relief for jurisdictions where an Eligible Competent Authority Agreement had not entered into force by 30 June 2026. The measure applies to Barbados, Switzerland and Turkey. In such cases, Luxembourg will not require a local filing until 31 December 2026, provided the return has been filed in the relevant jurisdiction. If the ACD does not receive the required information by that date, a local filing will be required.
Transitional provisions clarified
The updated FAQs further clarify the transitional provisions under Article 53. The ACD confirmed that the transitional measures apply from the Transition Year onwards.
For financial reporting purposes, entities may use either their own annual financial statements or the consolidated financial statements of the Ultimate Parent Entity. Where consolidated accounts are used, the underlying data must be reliably traceable to the Luxembourg entity concerned.
The guidance also addresses the treatment of deferred taxes, distinguishing between deferred taxes recognised in financial statements and those disclosed in the notes to the accounts. The ACD confirmed that disclosure of deferred tax assets and deferred tax liabilities in the notes alone is sufficient to satisfy the legal requirements.
To benefit from the transitional measures, the ACD recommends that all deferred tax assets and deferred tax liabilities be recognised or disclosed in the financial statements for the fiscal year immediately preceding the Transition Year, such as the 2023 fiscal year for groups entering the Pillar Two regime in 2024.
The updated guidance provides further clarity on the administrative and compliance requirements of Luxembourg’s Pillar Two framework, particularly in relation to registration procedures, GIR filing obligations and the application of transitional relief measures.
This announcement was made on 5 June 2026.
