The essentials: How is the transition from the Union of Luxembourg Companies to the Administration of Direct Contributions (ACD) going?
Jean-Paul Olinger, director of the ACD: Very good. This is a change, certainly, because the ACD is a large administration of 1,100 people on 24 sites spread across 14 municipalities with many stakeholders in Luxembourg and abroad. However, my professional experience of almost 20 years, both at UEL and before in a tax firm, has prepared me well.
Has this background guided your vision of taxation? Is there a political aspect?
Not really. Everything that is fiscal policy emanates from the Ministry of Finance and the administration applies the law.
As director of the UEL, what change would you have hoped to see at the ACD level?
Like all taxpayers, improve accessibility, better guide the taxpayer and advance digitalization.
“Luxembourg has tax rates above the OECD average.”
Arriving at a time when the government wants to lower taxes, is that easier?
This government has been very active since its beginnings. It is up to the administration to implement the bills, once adopted. From an economic point of view, if you want to revive an economy, reducing taxes and increasing purchasing power are justified.
What are the strengths and weaknesses of this tax system?
The system was established during the German occupation and has evolved significantly since the 1960s thanks to numerous reforms. Generally speaking, tax legislation reflects society, but with a time lag. The challenges arising from societal, technological and legislative changes (also European) require continuous adaptation. This is why the government is considering reforms, especially individualization which will put an end to our concept of fiscal household which no longer necessarily reflects reality.
Luxembourg is still often presented as a tax haven. What about it?
Luxembourg has implemented all European regulations and international recommendations and even has tax rates above the OECD average. Its attractiveness results mainly from non-fiscal factors and the political and financial stability of the country.
Make his declaration “as soon as possible, ideally before summer”.
Other countries impose shorter deadlines on paper declarations to encourage the transition to digital…
An interesting proposal… For the moment, we have chosen a voluntary transition from paper to digital for natural persons. Already today, two variants – the PDF declaration and the digital assistant – are available via the MyGuichet.lu platform and are continually improved.
What is the best date to submit your return?
Obviously as early as possible, ideally before summer. In reality, more than half of taxpayers submit their declaration after September, the majority of whom after the reminder sent in mid-November, leading to correspondingly longer processing times.
What about the delays…
We process around 350,000 individual files and 120,000 company files in Luxembourg. At this stage, for the years 2019 to 2022, the percentage of closed files varies depending on the fiscal year from 91.70% to 99.97%. For the year 2023, the percentage of files closed on December 1, 2024 amounts to 46.29%, taking into account the fact that the deadline for submitting declarations is December 31, 2024.
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