Luxembourg transparency score "excessively harsh," says ministry

Luxembourg's Finance Ministry has defended itself against accusations that it does not comply on transparency matters for tax purposes with other countries.

Responding to ratings given by the peer review group Global Forum on Transparency and Exchange of Information for Tax Purposes, the ministry said its findings were “excessively harsh.”

It said in a statement: “Luxembourg regrets that it has been declared non-compliant in respect of the implementation of these standards. It considers this rating to be excessively harsh, particularly in view of the Global Forum's previous observations with regard to the legal and regulatory framework put in place by Luxembourg."

Commitment made to information exchange

The ministry went on to say that Luxembourg had made a “commitment to exchange information effectively” and is experienced in exchanging information for tax purposes with several mutual information exchange agreements in place.

Recently, it signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and its Protocol.

Meanwhile, from 2015, Luxembourg will automatically exchange information in connection with the current EU Savings Directive, applying the same system as the other European Union member states.

Rating disproportionate

The ministry pointed out that it receives a high volume of requests for information each year. Over a three year period, it received 832 requests of which 785 were complied, a track record which it considers good given the high volume.

It said: “The Global Forum's interim report from July 2013 duly recognised the volumes involved and the diligence of Luxembourg's responses. Whereas countries that have not received any requests or less than 5 percent of the volume of requests submitted to Luxembourg have been declared 'largely compliant', the review and rating system lacks a proportionality criterion.”

The Finance Ministry said it will carefully review the recommendations made by the Forum and remains “firmly committed to moving forward with transparency and the exchange of information for tax purposes, while ensuring that legal requirements and the protection of privacy are fully respected.”