A cross-border arrangement is reportable in Luxembourg if it meets at least one DAC6 hallmark; hallmarks in categories A, B and some of C count only if a tax advantage is a main benefit. Promoters and service providers with a Luxembourg nexus file with the Administration des contributions directes through MyGuichet within 30 days of the first step, availability or readiness. Lawyers bound by secrecy notify only their client; then the taxpayer files. Fines reach EUR 250,000.
A filing duty for the advisers first, the taxpayer second
DAC6 is the EU rule that makes advisers tell the tax authorities about certain cross-border tax arrangements before, or very soon after, they are used. It came from Council Directive (EU) 2018/822, which amended the directive on administrative cooperation in tax matters. Luxembourg transposed it by the Law of 25 March 2020, and reports have been due since 1 July 2020, with a look-back to arrangements whose first step was taken from 25 June 2018.
The logic is simple. A cross-border arrangement is reportable if it shows at least one of the features listed in the directive, called hallmarks. Some hallmarks count only if saving tax is a main purpose. Others count whatever the motive. The report goes first from the intermediary: the adviser, bank, fiduciary or domiciliation agent who designs, markets, organises or helps implement the arrangement. If there is no EU intermediary, or the intermediary is protected by professional secrecy, the duty passes to the taxpayer.
Luxembourg holding and financing companies sit in the middle of cross-border flows, run with service providers who are intermediaries themselves. A SOPARFI that lends to a German affiliate, pays a service fee to an associated company outside the EU or moves intellectual property within its group should know where DAC6 bites, because its domiciliation agent will ask.
25 March 2020
Transposes Directive (EU) 2018/822; amended in 2026.
Cross-border only
No domestic extension in Luxembourg.
30 days
From the first trigger; quarterly updates for marketable schemes.
Up to EUR 250,000
For late, missing or wrong reports and notifications.
What counts as a cross-border arrangement
Arrangement. The directive does not define the word, and the Court of Justice read it broadly in its judgment of 29 July 2024 in Belgian Association of Tax Lawyers and Others (C-623/22). An arrangement can be a single transaction, a series of steps or a structure, and it can consist of several linked arrangements. Each part is separately reportable only if it carries a hallmark itself.
Cross-border. The arrangement must concern more than one member state, or a member state and a third country, and meet one of five tests. The simplest is that the participants are not all resident in the same state; the others cover dual residence, permanent establishments, activity abroad without a taxable presence, and effects on automatic exchange of information or beneficial ownership. A Luxembourg holding lending to its German subsidiary is cross-border by the first test.
Taxes. DAC6 covers all taxes within the administrative cooperation directive: corporate income tax, municipal business tax, personal income tax, net wealth tax, registration and inheritance duties and similar levies. VAT, customs duties, excise duties and compulsory social security contributions are outside. A Belgian challenge argued that extending the regime beyond corporate tax was disproportionate; the Court rejected it in July 2024.
Law and practice: Council Directive 2011/16/EU as amended by Directive (EU) 2018/822, Article 3(18) to (25) and Article 8ab; Law of 25 March 2020 on reportable cross-border arrangements, Mémorial A No. 192 of 26 March 2020; Court of Justice, 29 July 2024, Belgian Association of Tax Lawyers and Others, C-623/22.
Categories A to E and the main benefit test
Annex IV of the directive lists the hallmarks in five categories. A covers generic features of marketed schemes, B specific features, C cross-border payments and double relief, D information exchange and beneficial ownership, and E transfer pricing.
| Hallmark | What it catches | Main benefit test? |
|---|---|---|
| A1 | Confidentiality: the taxpayer may not disclose how the scheme saves tax to other advisers or the tax authorities | Yes |
| A2 | Fee fixed by reference to the tax advantage, or refundable if the advantage is not obtained | Yes |
| A3 | Standardised documentation or structure that needs no substantial customisation | Yes |
| B1 | Buying a loss-making company, closing its main activity and using its losses | Yes |
| B2 | Converting income into capital, gifts or lower-taxed or exempt revenue | Yes |
| B3 | Circular transactions that round-trip funds through interposed entities without commercial function | Yes |
| C1(a) | Deductible cross-border payment between associated enterprises to a recipient resident nowhere for tax purposes | No |
| C1(b)(i) | Same, recipient resident in a state with no corporate tax or a rate of zero or almost zero | Yes |
| C1(b)(ii) | Same, recipient resident in a jurisdiction on the EU or OECD list of non-cooperative jurisdictions | No |
| C1(c), C1(d) | Same, payment fully exempt or benefiting from a preferential regime in the recipient state | Yes |
| C2, C3, C4 | Depreciation of one asset in two states; double relief on the same income; asset transfer valued materially differently | No |
| D1, D2 | Undermining CRS reporting; non-transparent legal or beneficial ownership chain | No |
| E1, E2, E3 | Unilateral safe harbour; hard-to-value intangibles; intra-group transfer that halves the transferor's projected EBIT | No |
The main benefit test. For the hallmarks marked yes, the arrangement is reportable only if, having regard to all relevant facts and circumstances, the main benefit or one of the main benefits a person may reasonably expect from it is a tax advantage. The test is objective, and it is not met merely because a payment hallmark under C1(b)(i), C1(c) or C1(d) is present. The Court of Justice found the test sufficiently clear in 2024, pointing to the OECD BEPS Action 12 report as a guide. A tax advantage in a third country counts too.
Associated enterprises. The C1 hallmarks apply only to payments between associated enterprises: broadly, a holding of more than 25% of votes, capital or profits, significant influence, or common control.
Category D in practice. D1 catches arrangements that undermine CRS reporting. D2 catches a legal or beneficial ownership chain without substantive economic activity, set up outside the beneficial owner's state, that leaves the beneficial owners unidentifiable. A Luxembourg company correctly registered in the RBE rarely meets D2; layers of nominees above it may.
Category E in practice. E3 is the hallmark that business restructurings meet. It applies where functions, risks or assets move within the group and the transferor's projected annual earnings before interest and taxes over the next three years fall below 50% of what they would have been without the transfer. Our note on transfer pricing in Luxembourg covers the valuation side.
Law and practice: Directive 2011/16/EU, Annex IV, Parts I and II; Law of 25 March 2020, Annex; OECD, Mandatory Disclosure Rules, Action 12 (2015); Court of Justice, C-623/22, on the clarity of the hallmarks and the main benefit test.
Intermediaries, privilege and the relevant taxpayer
Promoters. The primary intermediary is any person who designs, markets, organises, makes available for implementation or manages the implementation of a reportable arrangement. In Luxembourg practice that is typically a tax adviser, a law firm acting outside privilege, a bank structuring a product or a fiduciary building a holding structure.
Service providers. The secondary intermediary is any person who knows, or could reasonably be expected to know, that it has undertaken to provide aid, assistance or advice on designing, marketing, organising, implementing or managing a reportable arrangement. A domiciliation agent, an accountant who books the transactions or a bank opening the accounts can fall here.
EU nexus. An intermediary reports in Luxembourg if it is tax resident there, has a Luxembourg permanent establishment through which the services are provided, is incorporated in or governed by Luxembourg law, or is registered with a Luxembourg professional association. If it has a nexus with several member states, it reports in the first one in that order, and only once.
Professional secrecy. Luxembourg exempts lawyers, chartered accountants and audit professionals from reporting where the information is covered by their professional secrecy. The exempt intermediary must notify within 10 days. The Court of Justice ruled in Orde van Vlaamse Balies (C-694/20) on 8 December 2022 that requiring a lawyer to notify other intermediaries, who are not his client, breaches the right to respect for communications with a lawyer. The Luxembourg bar responded with a circular of 22 December 2022 limiting the notification to the lawyer's own client. The law transposing DAC8, adopted by Parliament on 19 March 2026 as bill no. 8592, writes that rule into the DAC6 law. Chartered accountants and auditors must still notify other intermediaries or, failing them, the relevant taxpayer, and the 2024 judgment confirmed that the 2022 ruling protects lawyers only.
When the taxpayer reports. The duty shifts to the relevant taxpayer where there is no intermediary, as with an in-house scheme designed by the group's own tax team; where the intermediaries have no EU nexus, such as a Swiss or UK adviser; or where the only intermediaries are exempt through professional secrecy. Where several taxpayers are involved, the one that agreed the arrangement with the intermediary reports first, then the one managing its implementation.
Several intermediaries. Every intermediary is liable to report, but is released if it holds proof that the same information has already been filed by another intermediary, in Luxembourg or in another member state. That proof is the arrangement reference and the disclosure reference issued on filing. In practice the lead adviser files and circulates them.
Law and practice: Directive 2011/16/EU, Article 3(21) and (22) and Article 8ab(1) to (10); Law of 25 March 2020, on intermediaries, professional secrecy and the relevant taxpayer; Court of Justice, 8 December 2022, Orde van Vlaamse Balies and Others, C-694/20; Luxembourg bar circular 001/2022-2023 of 22 December 2022; bill no. 8592 transposing Directive (EU) 2023/2226 (DAC8), adopted on 19 March 2026.
Thirty days, MyGuichet and a EUR 250,000 ceiling
The 30-day clock. A report is due within 30 days beginning on the day after the earliest of three events: the arrangement is made available for implementation, it is ready for implementation, or its first step has been implemented. For a service provider the clock starts the day after it provided the aid, assistance or advice. The Court of Justice held these triggers sufficiently clear in 2024. In a group restructuring the first step is often the signature of the first intra-group agreement, not the closing date.
Marketable arrangements. An arrangement designed to be implemented without substantial customisation is marketable. The promoter files once, then makes a periodic report every three months with new information.
Where to file. In Luxembourg the competent authority is the Administration des contributions directes, not the registration duties administration. Filing is electronic through MyGuichet, either by manual entry or by uploading an XML file following the published schema; the administration publishes a user guide, sample files and an FAQ, last revised on 30 March 2026. From 1 January 2028 reports must also give the tax identification number of other related persons, a change made through DAC8.
Penalties. Failing to report, reporting late, filing incomplete or inaccurate information, or failing to notify, can lead to a fine of up to EUR 250,000 for intermediaries and taxpayers alike. The fine is set by the Administration des contributions directes according to the seriousness of the breach and can be appealed to the administrative tribunal.
Law and practice: Directive 2011/16/EU, Article 8ab(1), (2) and (18); Law of 25 March 2020, on deadlines, periodic reports and fines up to EUR 250,000; Administration des contributions directes, page on reportable cross-border arrangements and FAQ dated 30 March 2026, impotsdirects.public.lu; forms 500 and 100.
Where DAC6 typically bites, with three worked examples
Most Luxembourg holding and financing structures are not reportable at all. A SOPARFI that receives dividends from an EU subsidiary under the participation exemption and pays dividends up to its EU parent meets no hallmark. The problems sit in particular features: hybrid financing (C1(d)), IP and function moves (E2, E3), payments to listed jurisdictions (C1(b)(ii)), nominee layers (D2), loss buying (B1) and conversion of income (B2).
A Luxembourg SARL lends EUR 10 million to its German subsidiary at 6% under an instrument that Germany treats as debt and Luxembourg, because of its features, as equity. The German subsidiary would deduct EUR 600,000 of interest a year, saving roughly 30% in German corporate and trade tax, about EUR 180,000. In Luxembourg the payment would be treated as a dividend, so the 23.87% that would otherwise apply in Luxembourg City, about EUR 143,000, would not be paid. Hallmark C1(d) applies, because the payment benefits from a full exemption in the recipient state, and the main benefit test is met: the tax advantage is the reason for the hybrid feature, as the same funding could have been made as an ordinary loan. The adviser who designed it files within 30 days. In practice the anti-hybrid rules would undo the advantage, but DAC6 looks at the arrangement as designed.
An adviser proposes to merge two of a group's Luxembourg subsidiaries and refinance one of them, for a fee of 20% of the tax saved over three years. The adviser estimates tax savings of EUR 400,000 and the group expects EUR 50,000 a year of lower running costs. The fee meets A2. The main benefit test is met: EUR 400,000 of tax against EUR 150,000 of commercial savings over the same period. The arrangement is cross-border if the refinancing involves the group's Belgian parent. If the same merger were driven by EUR 1.2 million a year of operating savings, with a tax effect of EUR 60,000, the success fee alone would not make it reportable.
A Luxembourg SARL pays EUR 300,000 a year of service fees, deductible in Luxembourg, to an associated company resident in Vanuatu. After the Council update of 9 October 2026, Annex I of the EU list of non-cooperative jurisdictions has eight entries: American Samoa, Anguilla, Guam, Palau, the Russian Federation, Turks and Caicos Islands, the US Virgin Islands and Vanuatu; Panama and Viet Nam were removed. Hallmark C1(b)(ii) applies without any main benefit test, so the arrangement is reportable even if the services are real. Luxembourg also denies a deduction for interest and royalties due to associated enterprises in listed jurisdictions, under Article 168, paragraph 5, of the income tax law, in force since 1 March 2021. A payment to Panama made after 9 October 2026 would no longer meet C1(b)(ii); payments made while Panama was listed were caught.
Law and practice: Directive 2011/16/EU, Annex IV, hallmarks A2, C1(b)(ii) and C1(d); Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes, 9 October 2026; Income Tax Law (LIR), Article 168ter (hybrid mismatches) and Article 166 (participation exemption, no exemption for payments deductible at the payer). Corporate tax of 23.87% combined in Luxembourg City for 2026, as on our Benelux rates page. Amounts are illustrative.
Group policy, the domiciliation agent and the other DACs
A group DAC6 policy. Groups with Luxembourg entities should have a short internal procedure: who flags a cross-border transaction, who tests it against the hallmarks, who decides whether the main benefit test is met, who files when the group is the relevant taxpayer, and where the analysis is kept. Two pages are usually enough. The test should run before signing, because the 30-day clock may start at the first step.
What the domiciliation agent will ask. A Luxembourg domiciliation agent is regulated and, for DAC6, often a service provider intermediary. Before it books a new loan, a share transfer, a contribution of intangibles or a payment to a new associated company, expect a short questionnaire: the parties and their states, the purpose, whether an adviser designed the step, whether a report has been filed and, if so, the arrangement and disclosure references. If a promoter has filed, the references settle the matter. If nobody has filed and a hallmark is met, the agent will file itself rather than risk the fine. Our note on the SOPARFI compliance calendar places these checks in the year.
| Directive | Subject | Status in Luxembourg |
|---|---|---|
| DAC6 (2018/822) | Reportable cross-border arrangements | Law of 25 March 2020; amended by the DAC8 law in 2026 |
| DAC7 (2021/514) | Digital platform operators' reporting on sellers | Law of 16 May 2023; first reports in 2024 |
| DAC8 (2023/2226) | Crypto-asset service providers; CRS and ruling changes | Bill no. 8592 adopted on 19 March 2026; applies from 1 January 2026, first crypto report by 30 June 2027 |
| DAC9 (2025/872) | Pillar Two top-up tax information return and exchange | Law of 19 December 2025, in force from 1 January 2026 |
The neighbours. DAC8 extends reporting to crypto-asset service providers and also amends DAC6, as described above; our note on DAC8 crypto reporting explains it. DAC9 lets groups within Pillar Two file one top-up tax information return for the EU and have it exchanged. None of these replaces DAC6: a Pillar Two group still reports a hybrid loan under DAC6.
The future of DAC6. On 24 June 2026 the European Commission proposed a recast of the administrative cooperation directives, COM(2026) 308. For DAC6 it proposes to delete the generic category A hallmarks, to extend the deadline from 30 to 90 days from the first step, to narrow reporting to arrangements that are actually implementable, and to exempt groups within Pillar Two where no member is taxed below 15% as a result. The changes would apply from 1 January 2028. They are proposals: they need unanimity in the Council and may change. Until then the rules described here apply in full.
Law and practice: Law of 16 May 2023 (DAC7); bill no. 8592 (DAC8), adopted on 19 March 2026; Law of 19 December 2025 transposing Directive (EU) 2025/872 (DAC9); Law of 25 March 2020 (DAC6); European Commission proposal for a recast of the directive on administrative cooperation, COM(2026) 308 of 24 June 2026.
Check whether your arrangement is reportable
Simplified: Luxembourg DAC6 rules for a cross-border arrangement. The result is an indication, not an opinion; the hallmark descriptions are shortened.
DAC6 reportability check
Describe the arrangement and your role. You see whether it is likely reportable in Luxembourg, which hallmarks it hits and whether the main benefit test matters, who files, how many days are left and what to do next.
Luxembourg has no domestic DAC6.
No hallmark, no report; some need the main benefit test.
From the first step, availability or readiness.
Keep the arrangement and disclosure IDs.
DAC6 in Luxembourg: frequent questions
Does DAC6 apply to purely Luxembourg arrangements?
No. Luxembourg transposed the directive without extending it to domestic arrangements. Only cross-border arrangements are reportable: those concerning either more than one EU member state or a member state and a third country, and meeting at least one hallmark.
Is every arrangement with a hallmark reportable?
Only if the hallmark is met on its own terms. Hallmarks in categories C2 to C4, D and E, and payments to listed or nowhere-resident recipients under C1, trigger reporting regardless of motive. The other hallmarks in A, B and C1 count only if obtaining a tax advantage is the main benefit, or one of the main benefits, reasonably expected.
Do Luxembourg lawyers still have to tell other advisers to report?
No. After the Court of Justice judgment of 8 December 2022 in Orde van Vlaamse Balies (C-694/20), the Luxembourg bar limited the notification to the lawyer's own client, and the law transposing DAC8, adopted in March 2026, writes that rule into the DAC6 law. Accountants and auditors bound by secrecy must still notify other intermediaries, or the taxpayer, within 10 days.
What is the penalty for not filing a DAC6 report in Luxembourg?
A fine of up to EUR 250,000, imposed by the direct tax administration for failing to report, reporting late, incomplete or inaccurate information, or a missing notification. The amount depends on the seriousness of the breach and can be appealed to the administrative tribunal.
Does the taxpayer have to mention the arrangement in its tax return?
Yes. A relevant taxpayer who files a Luxembourg return reports its use of the arrangement for each year it uses it: a company on form 500, an individual on form 100.