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Protection of the rule of law in the exchange of information on demand

  • United Kingdom
  • Luxembourg
  • Tax planning and consultancy


The Luxembourg law of 1 March 2019 has increased the protection of the rights of the information holder in the procedure of exchange of information on demand in tax matters.

Indeed, initially, the Luxembourg Law on Exchange of Information in Tax Matters of 25 November 2014 (the “Law on Exchange of Information”) granted no recourse to the information holder or the taxpayer. It did not either provide for a duty for the Luxembourg tax authorities to consider the foreseeable relevance of the information requested by foreign tax authorities.

Under the initial rules, when receiving an information request from foreign tax authorities, the Luxembourg tax authorities were only verifying that the foreign tax authorities were competent and that their request was based on an instrument in force (i.e. tax treaty, European Directive…). The Luxembourg tax authorities did not check whether the information requested seemed relevant for tax purposes. Furthermore, the Luxembourg information holder, or the concerned taxpayer, had no recourse against the injunction made by the Luxembourg tax authorities to provide information.

Further to the Berlioz Case (C-682/15), the Luxembourg Parliament has amended the Law of Exchange of Information in order to add the obligation for the Luxembourg tax authorities to verify that the information requested are not without foreseeable relevance in light of the requirements of the concerned tax investigation.

Furthermore, the new law also grant to the Luxembourg information holder a recourse before the administrative court against the injunction to provide information. It shall be noted that the latter right was already claimed in a case pending before the Luxembourg Administrative Court.

The Luxembourg have already acknowledged the change of rules by issuing a revised circular letter on exchange of information (Ref L.G. # 19 dated 22 February 2019).