New draft law to extend deadlines in fiscal matters in the context of COVID-19

On 8 April 2020, the draft law n°7555 was issued by the Luxembourg Parliament dealing with the necessity for extension to deadlines in fiscal, financial and budgetary matters in the wake of the COVID-19 crisis. This draft law comes after the Luxembourg tax authorities released a newsletter on 18 March 2020 which addressed the cancellation of tax advances and the extension of deadlines pertaining to the filing of tax returns, yet with a far wider scope.

The objective of the draft law is to introduce a number of extensions to deadlines for certain legislative provisions in fiscal, financial and budgetary matters, albeit for a limited period of time. The draft law does not, however, extend to deadlines applied to indirect taxes such as VAT.

The primary provisions concerning fiscal matters are:

  • 30 June 2020 is the new deadline for filing the 2019 income tax, corporate income tax and municipal business tax returns.
  • 30 June 2020 is the new deadline for opting for individual taxation (given that, by default, the collective taxation applies to partners and married couples) or for amending or cancelling one’s original choice.
  • 30 June 2020 is the new deadline fixed with regards to income allocated for 2019, applicable to the option exercise period for the direct debit by the beneficial owner provided for in article 6bis, number 2, 2nd indent of the amended law of 23 December 2005 introducing a withholding tax on certain interest earned on savings in movable property.
  • 30 June 2020 is the new deadline for the exercise of the 20% final levy option for the income allocated for the 2019 taxation by beneficial owners who receive payments in interest allocated by certain agents established outside Luxembourg according to the law dated 23 December 2005 which introduced a withholding tax on certain interest earned on savings in movable property.
  • 30 June 2020 is the new deadline applicable to “réclamations” (§ 228 AO) and to “recours hiérarchiques formels” (§ 237 AO). These actions come in the wake of the suspension of deadlines prescribed in constitutional, judicial, administrative court proceedings during the COVID-19 crisis by the Grand Ducal Decree dated 25 March 2020.
  • 31 December 2021 is the new deadline for any statutes of limitation initially due to terminate on 31 December 2020. This will be applicable to every type of statute of limitation and will also be applicable for all taxes payable to the Treasury in addition to all tax receivables, the collection of which is carried out by the Administration des Contributions Directes.
  • 31 December 2021 is the new deadline for privileges and guarantees, covered by the provisions of the amendments in the law of 27 November 1933, related to the collection of direct taxes whose effects are initially due to end before 31 December 2020.