Common reporting standards for the automatic exchange of information on financial accounts

With its national Law of 18 December 2015 on the automatic exchange of financial information (Law of 2015), the Grand Duchy of Luxembourg transposed the new OECD standard.

In recent years, efforts to combat cross-border tax evasion and avoidance have been significantly stepped up. The automatic exchange of information should facilitate tax transparency at both European and international level. At international level, the OECD has developed a norm generally known as the “Common Reporting Standard” (“CRS”). The aim is to apply a common procedure for the global reporting of tax information.

The Common Reporting Standards (“CRS”) provide common standards for due diligence, reporting and the exchange of financial account information. Under the CRS, the 78 countries currently participating – including Luxembourg – will automatically receive and exchange financial information each year regarding all reportable accounts determined as such by financial institutions on the basis of common due diligence and reporting procedures. The information will be submitted to the competent Luxembourg tax authority, the Administration des Contributions Directes. This body will then send the information to the relevant tax authorities in the country of residence of the person required to report.

Luxembourg has signed the CRS and is expected to implement the automatic exchange of information from 1 September 2017, which will involve information for the 2016 tax year.

Accordingly, the investment fund and/or Main First Affiliated Fund Managers S.A. in its capacity as management company are required to perform due diligence and reporting procedures in accordance with the CRS, as stipulated in the Law of 2015. Investors may be requested to make additional information available to the Company in order to enable it to fulfil its obligations under the CRS. Failure to provide the information requested may result in the investor becoming liable for taxes, fines or other payments. The Company may seize such an investor’s units, transfer them to third parties (to be determined at its sole discretion), or otherwise terminate and/or cancel them.

We have made the necessary adjustments, in particular to the subscription certificates and sales documents, to ensure that you, as our client, are informed of these circumstances and can obtain the necessary documents and information on your side. Nevertheless, if you have any questions, we recommend that you contact your tax advisor and ensure that you are fully informed.

You can find all the necessary background details and information on the OECD website (in German).

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