Financial Crime World

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New AML/CFT Regulations for Tax Offenses in Luxembourg

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Introduction

The Luxembourg government has introduced new rules to combat money laundering and terrorist financing (AML/CFT) by expanding the scope of offenses that must be declared to the Financial Intelligence Unit (FIU). This change includes tax offenses, which are now subject to AML/CFT regulations.

Tax Offenses Subject to AML/CFT Regulations

The following tax offenses are now subject to AML/CFT regulations:

  • Tax Fraud: a threshold of EUR 200,000 or a significant amount (either in absolute or relative terms) determines whether the offense is aggravated.
  • Tax Deceit: no threshold applies; professionals must assess whether the amount is significant.

Impact on Internal Management Requirements for Professionals of the Financial Sector

To comply with these new regulations, professionals in the financial sector must adapt their policies and procedures to include tax offenses. This includes:

AML/CFT Risk Assessment

  • Conduct a thorough risk assessment to identify potential areas of vulnerability

Customer Due Diligence Documentation

  • Maintain accurate and up-to-date documentation on customer due diligence

Employee Training

  • Provide training for employees to recognize signs of tax offense laundering

Transaction Monitoring System Review

  • Regularly review transaction monitoring systems to detect suspicious activity

Close Monitoring by Compliance Officer, Internal Audit, and Reporting to Management

  • Ensure close monitoring by compliance officer, internal audit, and reporting to management

Obligation to Communicate with FIU without Delay

  • Report any suspected tax offenses to the FIU without delay

PwC Services

PwC offers modular services to help professionals understand and implement the new regulations, including:

Review/Drafting of AML/CFT Procedures

  • Review or draft AML/CFT procedures to ensure compliance with new regulations

In-Depth Review of High-Risk Client Files

  • Conduct an in-depth review of high-risk client files to identify potential areas of vulnerability

Preparing a Methodology to Detect Fraud (Matrix)

  • Prepare a methodology to detect fraud, including the creation of a matrix to analyze suspicious activity

Organizing Informational Trainings

  • Provide informational trainings for employees on AML/CFT regulations and procedures

Diagnosis and Implementation Support

  • Offer diagnosis and implementation support to ensure smooth transition to new regulations

About PwC Luxembourg

PwC Luxembourg is the largest professional services firm in Luxembourg, providing audit, tax, and advisory services to local and multinational companies.