The automatic exchange of information regimes — US Foreign Account Tax Compliance Act (FATCA) and OECD Common Reporting Standard (CRS), implemented in Luxembourg through the amended DAC 2 Directive — impose significant classification, due diligence, documentation, and annual reporting obligations on Luxembourg financial institutions, investment funds, and holding structures. Non-compliance carries material financial and reputational risks, and the Luxembourg ACD has repeatedly emphasised the importance of maintaining robust written policies, procedures, and controls.

HACA Partners provides a comprehensive FATCA/CRS compliance service covering:
• Classification analysis: detailed assessment of the FATCA and CRS status of the entity or fund structure — determining whether it qualifies as a Reporting Financial Institution, Non-Reporting Financial Institution, or Non-Financial Entity — and identifying the resulting classification, documentation, and reporting obligations.
• Investor due diligence and self-certification review: collection, plausibility check, and critical review of FATCA/CRS self-certification forms received from investors and clients, including assessment of change-of-circumstance situations and follow-up documentation requirements.
• Annual FATCA and CRS reporting: preparation and filing of annual FATCA and CRS reports with the Luxembourg ACD by the applicable deadlines (30 June for CRS), including data quality controls, reconciliations, and generation of notifications to reportable investors.
• Q&A support and authority liaison: assistance in managing communications with the ACD, service providers, transfer agents, and depositary banks on FATCA/CRS-related matters, including responses to queries and clarification requests.
• Prospectus and regulatory documentation update: review and update of fund prospectuses, subscription documents, and other regulatory documentation to reflect current FATCA/CRS classification and disclosure requirements, carried out in partnership with specialist law firms.
• Policy and procedure framework: design and implementation of written FATCA/CRS policies and procedures, registers of actions, and oversight frameworks — in line with the ACD’s expectations and best market practice.

As the ACD intensifies its focus on FATCA/CRS governance and has explicitly called for entities to maintain documented policies and oversight frameworks, HACA Partners helps clients move from reactive compliance to a structured, audit-ready programme that demonstrates robust governance to regulators at all times.

Transfer pricing has become an increasingly prominent compliance and governance topic for Luxembourg entities operating within international group structures — particularly following the introduction of formal Luxembourg transfer pricing legislation and the continued impact of OECD BEPS standards. Demonstrating that intercompany transactions are conducted at arm’s length, and maintaining adequate documentation to support this, is now a core regulatory and tax expectation.

HACA Partners provides transfer pricing compliance and governance support covering:
• Transfer pricing risk review and health check: assessment of existing intercompany transaction structures and pricing arrangements against Luxembourg tax rules, OECD guidelines, and the arm’s length standard — identifying areas of risk and recommending remediation actions.
• Transfer pricing policy design and documentation: development and formalisation of transfer pricing policies for key intercompany flows — including management fees, intragroup financing, service charges, and fund management remuneration — in line with OECD-compliant documentation standards.
• Governance framework and procedures: implementation of internal governance structures and procedures to ensure that transfer pricing policies are consistently applied, monitored, and reviewed on an ongoing basis.
• Assistance on specific transfer pricing matters: advisory support on particular intercompany transactions, pricing methodologies, benchmarking analyses, and the preparation of documentation required to support the entity’s transfer pricing positions.
• Coordination with specialist advisors: where required, HACA Partners works in close collaboration with specialist tax counsel and international transfer pricing advisors to ensure that cross-border and multi-jurisdictional dimensions of the client’s transfer pricing framework are addressed in a coherent and coordinated manner.

Our transfer pricing support is designed to be practical and proportionate — giving entities the documentation and governance structures they need to manage transfer pricing risk without creating unnecessary complexity.

CSSF Circular 20/744 has introduced a structured framework for the assessment and management of tax risks within Luxembourg regulated entities. Compliance with this circular requires entities to review their risk matrices, conduct structured impact analyses, and maintain documented remediation plans across a range of tax-related indicators — with particular focus on the correct calculation and payment of the taxe d’abonnement (subscription tax)

HACA Partners provides dedicated support for compliance with CSSF Circular 20/744, including:
• Risk matrix review and update: structured assessment and recalibration of the entity’s tax risk evaluation matrices across the indicators covered by the circular, ensuring that risk levels are accurately reflected and documented.
• Impact analysis: detailed analysis of the tax risk implications of specific operational, structural, or regulatory changes for the entity — identifying areas where existing frameworks may need to be strengthened or updated.
• Remediation planning and execution: preparation and implementation of remediation plans addressing gaps identified through the risk assessment or through updated questionnaire-based approaches, covering delegate oversight, counterparty risk, and internal process reviews.
• Taxe d’abonnement review: comprehensive review of the taxe d’abonnement calculation methodology, including the treatment of eligible exemptions, NAV basis, and reporting to the Luxembourg tax authorities — ensuring accuracy, consistency, and full compliance with applicable rules.
• Questionnaire-based client and delegate reviews: preparation and management of structured questionnaires directed at clients, investors, and delegates as part of the ongoing tax risk monitoring programme required under the circular.

Our approach to CSSF Circular 20/744 compliance is built on the same structured, audit-ready methodology that underpins all of our tax compliance services — ensuring that entities can demonstrate robust governance and proportionate risk management to the CSSF at all times.

Value Added Tax (VAT) in Luxembourg presents specific challenges for financial institutions, investment funds, and service providers — particularly given the complex rules around VAT exemptions applicable to fund management and financial services, the treatment of cross-border supplies, and the interaction between VAT recovery positions and the entity’s overall cost structure.

Managing VAT compliance effectively requires not only accurate return preparation but also a clear understanding of the applicable VAT framework, a well-designed internal calculation process, and documented procedures that can withstand scrutiny from the Luxembourg VAT authorities (Administration de l’Enregistrement, des Domaines et de la TVA — AED).

HACA Partners provides VAT compliance support in partnership with a specialist external VAT advisor, combining regulatory compliance expertise with technical VAT knowledge:
• VAT registration and status review: assessment of the entity’s VAT registration obligations, including analysis of the taxable person status, applicable VAT exemptions, and partial exemption positions relevant to financial and fund management services.
• VAT return preparation and filing: preparation and submission of periodic Luxembourg VAT returns, in close coordination with the entity’s accounting team and VAT advisor, ensuring accuracy of input and output VAT calculations and timely filing in compliance with AED deadlines.
• VAT calculation process review and design: review of the existing VAT calculation methodology and implementation of structured, documented processes and internal controls to ensure that the VAT position is computed consistently, accurately, and in line with applicable Luxembourg and EU rules.
• VAT procedure and governance framework: design and implementation of internal VAT procedures covering the end-to-end VAT compliance cycle — from invoice review and input tax analysis to return preparation, filing, and communication with the AED.
• VAT audit assistance: support in managing VAT audits and queries from the AED, including preparation of documentation, coordination with the specialist VAT advisor, and drafting of responses to authority requests.
• Cross-border VAT and supply chain analysis: assessment of the VAT treatment of cross-border services received and provided by the entity, including reverse charge analysis and the identification of potential VAT risks in multi-jurisdictional arrangements.

Our VAT compliance service is designed to give entities a clear, documented, and well-governed VAT position — reducing the risk of errors, penalties, and audit exposure while ensuring that the VAT framework is fully integrated into the entity’s broader tax compliance programme.

Sound tax compliance is increasingly inseparable from sound tax governance. Regulatory authorities — including the CSSF, the ACD, and the AED — expect regulated entities to maintain documented tax policies and governance frameworks that demonstrate a structured, proportionate, and proactive approach to tax risk management. This expectation applies across corporate tax, VAT, FATCA/CRS, and transfer pricing alike.

HACA Partners supports clients in building and maintaining robust tax governance frameworks:
• Tax governance policy design: drafting and implementation of a comprehensive tax governance policy covering the entity’s approach to corporate tax, VAT, FATCA/CRS, and transfer pricing — including roles and responsibilities, escalation procedures, and oversight mechanisms.
• FATCA/CRS policy and procedure framework: as explicitly required by the ACD, design of written FATCA/CRS policies, registers of actions, and oversight procedures, ensuring that the entity has a documented and auditable compliance programme in place.
• VAT governance framework: implementation of internal VAT policies and procedures covering the full VAT compliance cycle, designed to ensure consistency, accuracy, and clear accountability across all VAT-related activities of the entity.
• Corporate tax governance: review and formalisation of the entity’s approach to corporate tax compliance, including escalation protocols, review and approval workflows for tax filings, and documentation standards for tax positions.
• Integrated tax risk management: development of a structured tax risk register and monitoring framework that covers all material tax obligations of the entity — enabling the board and senior management to maintain effective oversight of tax compliance across the full tax perimeter.

A well-designed tax governance framework does more than satisfy regulatory expectations — it creates a sustainable, efficient compliance infrastructure that reduces the risk of errors, strengthens internal controls, and positions the entity to respond confidently to any regulatory enquiry or audit.