Agefi Luxembourg - octobre 2025

AGEFI Luxembourg 38 Octobre 2025 Droit / Emploi O n 6 August 2025, the Luxem- bourg Administrative Court of Appeal ( Cour Administra- tive, 6 août 2025, n°52321C ) (the “Ad- ministrative Court” or the “Court”) clarified implications deriving from a provisional tax assessment issued under § 100a of the General Tax Law ( Abgabenordnung , “AO”) and confirmed that tax of- fices have full discretion to decide whether to re- visit a tax assessment at a later point in time. In this context, the most inter- esting question raised in this deci- sion is probably the following: when a provisional tax assessment has been issued based on a return containing an error, can a taxpayer require the tax office to proceedwith a further re- view and issue a (diverging) final tax assessment even after the deadline to contest that provisional assessment has elapsed? Summary of the case On 19 October 2017, the taxpayer filed the tax re- turn for FY 2016 (the “ original tax return ”) for which it received, a couple of weeks later, the cor- responding provisional tax assessments (1) . The taxpayer later discovered that some informa- tion reported in the original tax return was incor- rect. Notably, it had declared a participation that it treated as an exempt asset for net-wealth tax pur- poses under the Luxembourg participation-ex- emption regime, while indicating on Form 506A that the dividend distributed by the subsidiary in FY 2016 would remain fully taxable. Realizing the mistake, it attempted to correct it and proceeded to file an amended version to also request the ap- plication of the Luxembourg participation exemp- tion regime on the dividend received. Hence, the taxpayer filed a rectified tax return on 12 February 2018, a few days too late. Indeed, the tax office swiftly notified the taxpayer on 19 February 2018 that, since the deadline to ei- ther request a rectification or file an administrative claim (i.e. within 3months as of the issuance of the tax assessment) had elapsed (onWednesday 7 Feb- ruary 2018, i.e. only a fewbusiness days before the 12 February 2018, being a Monday), such revised return would not be considered, and no new tax assessments would be issued. The taxpayer did not reply to the tax office but reached out to the Director of the Luxembourg di- rect tax authorities ( “ LTA”) almost 3 years later, on 15 December 2021. The letter sent, considered by the Director as a formal hierarchical appeal, was however deemed inadmissible due to late filing. In addition, the Director indicated that, in any case, tax agents should enjoy discretionary power to de- cide whether a provisional tax assessment should be subject to further review. Unsatisfied with the outcome, the taxpayer filed an appeal with theAdministrative Tribunal which, however, confirmed the Director’s decision ( Tri- bunal administrative, 18 décembre 2024, n°48041 ). An appeal to theAdministrative Court followed. Decision of theAdministrative Court TheAdministrativeCourt only addressed the ques- tionofwhether tax offices shouldbe legallyobliged to amendprovisional tax assessments issuedbased on§ 100aAOwhena taxpayer files a revised return. In this respect, the arguments sustainedby the latter may be summarized as follows: - The concept of res judicata (2) invoked by the LTA should not apply and no final character should be attached to the provisional tax assessment, as the latter has expressly been issued “subject to later review” within the statute of limitation pe- riod (i.e. 5 years). - The request introduced earlier (i.e. request to consider the rectified return) should not be assim- ilated to either a rectification or an administrative claim but rather as a notification addressed to the relevant tax office that the original tax return was incorrect and hence the presumption of veracity should not apply. - Parliamentary proceedings of the Luxembourg law of 19 December 2008 (which introduced § 100aAO) establish that the LTAhave discretion to issue either a provisional assessment under § 100a AO or a final assessment under § 204(1) AO, yet that discretion should not be interpreted to in- clude the decision of whether to undertake a sub- sequent review — especially when the assessing authority has been notified of an error. Were that the case, it would contravene the principle of fair- ness enshrined in § 2 of the tax adaptation law ( Steueranpassungsgesetz , “ SAnpG ” ). TheCourt, however, hadadiverging interpretation of the intention of the legislator. Quoting the par- liamentarydocuments relieduponby the taxpayer, the judges noted in that respect that “ the decision to issue an assessment on the basis of a tax return [was] dis- cretionary and [did] not need to be accompanied by rea- sons” and that in an assessment issued following the filing of a tax return, the LTAshould “ reserve the right to carry out subsequent enquiries and audits of the file, but is not under an obligation to do so ’” (3)(4) . On this basis, the Court ruled that the legislator vested the LTA with discretionary powers on two levels: 1. At the point a tax return is filed: The LTA should be at liberty to either apply the procedure under § 100a AO (i.e. issuance of an automatic provisional tax assessment) or to carry on the reviewof the tax- payer’s tax situation anddeliver a final assessment. 2. After issuance of a provisional tax assessment: The relevant tax office shouldhavediscretion tode- cide whether the tax position of the taxpayer re- quires further review and whether a final tax assessment should be issued. In line with previous decisions, the Court further held that provisional as- sessments are subject to the same re- medial routes as final assessments— a rectification request under § 94(1) AO, an administrative claimunder § 228 AO, or a hierarchical appeal under § 237 AO — but all remedies are subject to the same three-month limitation period, effective from the date of the issuance of the assess- ment. Because the taxpayer filed the amended return on 12 February 2018, after the three-month period had ex- pired on 7 February 2018, and failed to respond to the tax office’s 19 February 2018 letter, the Court found that the taxpayer had not pursued available remedies in a timely manner and dis- missed the appeal. Hence, comingback to our initial question in the in- troduction, the short answer is no.A taxpayer, who has unfortunately missed the three-month limit to challenge a provisional tax assessment issued on the basis of a tax return filed with a mistake to his disadvantage, cannot require the tax office to reex- amine the situation and issue afinal tax assessment. Key takeaways This case law is interesting as it deals with a situa- tion thatwe, as tax advisors, come across regularly. Althoughwe may regret that it does not result in a positive outcome for the taxpayer, the decision is consistent with the position already taken by the LTAand the administrativeCourts alike (5) , which is that the content of a provisional tax assessment is- sued in accordancewith § 100aAOmay only be re- visited at the LTA’s discretion. In the case at hand, the judges explained that, in line with the legislator’s intention, the Luxembourg law allows taxpayers, inprinciple, to be assessedon the mere basis of what has been reported in their tax returns (in caseswhere the tax offices choose not to conduct a subsequent review). An assessment is- sued in those circumstances should therefore not be characterized as substantively adverse, since it would reflect the taxpayer’s own declaration. The corollary is that taxpayers are not entitled to require a reassessment simply because they deem the out- come unfavorable. Accordingly, this decision makes clear that proac- tivity is the taxpayer’s best ally: any request to amend a tax return or the corresponding assess- mentmust be submittedwithin threemonths of the tax assessment’s issuance, failing which the tax- payer will be precluded from pursuing any avail- able remedies. As with all decisions, this decision, though pre- dictable, remains potentially open to criticism. De- scribing the tax assessment issuedunder § 100aAO as “provisional” and subject to later review by the tax office may somehow create a misleading sense of legal certainty. Such formulation can indeed be read as suggesting that errors arising from an in- correct return couldbe correctedat any time so long as no final tax assessment has been issued. Moreover, the discretionary power granted to the LTA to either revisit or leave unamended such provisional tax assessments, even after having been notified of a mistake made by the taxpayer, risks the perception of arbitrariness, inconsis- tency and bad faith in administrative conduct. In that regard, it could legitimately raise questions whether the administration would have shown the same reluctance to amend the tax assessment had the taxpayer, conversely, erroneously claimed the benefit of the Luxembourg partici- pation exemption regime. In its legal reasoning, the Court explicitly dis- carded the taxpayer’s claim that this solution would contravene the principle of fairness en- shrined in § 2 StAnpG. As a closing remark, wewill note that theCourt in- directly suggests what approach the taxpayer should have followed. Indeed, the Administrative Court spontaneously mentioned that its findings regarding the principle of fairness as enshrined in § 2 StAnpG do not render impossible the objective unfairness requirement that could be needed, for instance, in a request for courtesy reduction under § 131AO (6) . This statement fromtheCourt, thatwas not strictly required in its legal reasoning, could be perceived as a free piece of advice kindly given to all taxpayers ending up in the same situation in the future about the right procedure to follow to max- imize their chances of success (i.e. the request for courtesy reduction procedure). Emilien LEBAS, Partner, Head of International Tax, Tax controversy & dispute resolution leader, Valentine PLATEAU, Manager, International Tax, KPMG Luxembourg 1) Provisional tax assessments issued based on § 100a AO are generatedautomatically,astheymerelyreproducetheinforma- tionprovided in the corresponding tax returns. They also leave the door open for the tax office to audit, and potentially chal- lenge, the submitted tax returns within a 5-year period which startsrunningonthe1stJanuarywhichfollowstheyearduring which the tax liability arose. 2) In French: force de chose jugée. 3)Unofficialtranslationbytheauthors.Originalfrenchversion: « La décision de procéder par voie d’imposition suivant déclaration est discrétionnaire, elle ne doit pas être motivée », et à travers un bulletin d’impôt sur déclaration, le bureau d’imposition « se réserve le droit de procéder ultérieurement à l’instruction et au contrôle du dossier, mais sans pour autant y être obligé ». 4) Doc. parl. N°5757, commentary, p. 15. 5) Cour administrative, 13 février 2020, n° 43115C 6) «Cetteconclusionrelativeàl’analyseducritèredel’équitéprévupar le § 2 StAnpG dans la cadre de l’examen de la validité d’une décision d’un bureau d’imposition de ne pas procéder à un contrôle ultérieur suiteàl’émissiond’unbulletinsurdéclarationrestecependantsansin- cidencesur lavérification,dans lecadred’unedemandederemisegra- cieuse sur pied du § 131AO, de l’existence d’une iniquité objective qui pourrait, le cas échéant, résulter entre autres des délais et effets de la procédured’impositionsurlasituationducontribuable(cf.Couradm. 13 mars 2020, n° 43115C, Pas. adm. 2024, V° Impôts, n° 895). » Tax controversy series Administrative Court - Decision on provisional tax assessments L es archives du Canard enchaîné sont désormais totalement en ligne depuis le mois de septembre 2025. Le Canard enchaîné est un hebdomadaire français satirique et d’enquête paraissant le mercredi. Fondé le 10 septembre 1915, c’est le plus ancien titre de presse satirique encore actif en France. Le Canard enchaîné présente la particularité que son capital est verrouillé pour protéger son indé- pendance. Ses statuts imposent que ses actions soient détenues uniquement par les journalistes ou les retraités du journal. Depuis les années 1960, c’est aussi un journal d’enquête qui révèle nombre d’affaires, comme l’affaire des micros à la rédaction du Canard ap- pelée par dérision « l’affaire des plombiers », l’af- faire des diamants de Bokassa, l’affaire Papon et beaucoup d’autres. Le site du Canard enchaîné est digital depuis un an avec les éditions des années les plus récentes et à la fin dumois de septembre 2025 avec toutes les édi- tions depuis sa création en 1915. Un outil essentiel pourleshistoriensetlesjournalistesd’investigation. Les archives du Canard enchaîné totalement en ligne 2 3andMe, le premier test ADN en vente directe pour l'ascendance et les prédispositions génétiques à des su- jets liés à la santé, est de retour pour la gé- néalogie et la santé. 23andMe est une entreprise américaine de géno- miqueetdebiotechnologiepersonnellebaséeàSouth San Francisco, en Californie. Elle est surtout connue pour son service de tests génétiques en vente directe. Lesclientsfournissentunéchantillondesalivequiest analysé en laboratoire par génotypage par polymor- phisme nucléotidique unique (SNP) afin de générer des rapports sur l'ascendance et les prédispositions génétiques à des sujets liés à la santé. Le nomde l'en- treprise est dérivé des 23 paires de chromosomes d'une cellule humaine diploïde. Fondéeen2006,23andMeestrapidementdevenuela première entreprise à proposer des testsADN auto- somiques pour l'ascendance, que toutes les autres grandes entreprises utilisent désormais. Son activité de tests génétiques en vente directe par prélèvement salivaireaéténommée« Inventionde l'année»par le magazine Time en 2008. Google et Genentech figu- raient parmi les premiers investisseurs. 23andMe a conclu un partenariat avec GlaxoSmithKline afin de permettre à l'entreprisepharmaceutiqued'utiliser les résultatsdes testsde 5millionsde clientspour conce- voir de nouveauxmédicaments. En mars 2025, 23andMe a déposé le bilan (Chapitre 11). En juin, le TTAM Research Institute (rebaptisé 23andMe Research Institute), une association à but nonlucratiffondéeparAnneWojcicki,l'ex-épousede Sergey Brin, fondateur de Google, a surenchéri sur Regeneronetremportél'enchèrepour305millionsde dollars. Tous les utilisateurs de 23andMe ont été contactés le 24 septembre afinde reprendre leur rela- tion avec le 23andMeResearch Institute. 23andMe, le premier test ADN en vente directe, de retour