On December 28, 2015, the Luxembourg tax authorities released a new circular (LITL n°104/2bis) which imposes a new notification requirement on companies offering share plans to employees in Luxembourg.
The circular provides that, effective January 1, 2016, an employer whose employees receive awards under an equity plan is required to notify the tax office (“Bureau RTS”) in charge of the employer at least two (2) months before the plan becomes effective. The circular does not clarify when a plan becomes effective, but it is likely that the notification requirement is triggered when the plan is offered for the first time to employees in Luxembourg.
The notification requirement applies to all equity plans and equity-based awards (not just stock options). While the circular does not specify a form of notification, we understand that the notification should consist of a copy of the equity plan and the name of the beneficiaries (i.e., eligible employees).
If awards have been granted to employees in Luxembourg prior to January 1, 2016 and remain outstanding, Bureau RTS should be notified as soon as possible of the applicable plan(s). Bureau RTS has not set a deadline for completing the notification for outstanding awards, but employers should aim to complete the notification by the end of February 2016, if possible. The circular does not provide for penalties for failure to file the notification or for a late notification. However, a general obligation exists for Luxembourg taxpayers to inform the tax authorities, if so requested by the tax authorities. If the taxpayer is delinquent in providing the requested information, penalties may be imposed.