Luxembourg signed the intergovernmental agreement FATCA with the U.S.

Фото FATCA

The Luxembourg Finance Minister Pierre Gramegna signed with the U.S. Ambassador to Luxembourg, Robert A. Mandell, the intergovernmental agreement FATCA (Foreign Account Tax Compliance Act).

This agreement introduced the automatic exchange of information between Luxembourg and U.S. tax authorities on assets held in financial institutions in Luxembourg by U.S. citizens and citizens of Luxembourg in the United States.

The Luxembourg financial institutions will have to comply, «as soon as possible» to the applicable registration requirements, according to the electronic procedure defined by the Internal Revenue Service (IRS).

A month after announcing that as of 2015 it would move to automatic exchange of information within the EU, thus ending the transitional period during which Luxembourg enjoyed the system of withholding the taxes by place of origin of profit conforming the EU Directive on the taxation of savings, the Grand Duchy announced on May 21, 2013 choosing model 1 in the negotiations with the U.S. on FATCA. This model stipulates that the financial operators transmit the data to the Luxembourg Tax Collection Administration (CDA) which communicates it to the U.S. tax authorities, the Internal Revenue Service (IRS).