Luxembourg proposes to extend DAC7 reporting framework to non-EU jurisdictions

Executive summary

On 17 July 2026, the Luxembourg Government submitted a draft law (Draft Law) to Parliament that proposes amending the Luxembourg law of 16 May 2023 on the automatic and mandatory exchange of information reported by Platform Operators, which transposed Council Directive (EU) 2021/514 (DAC7) into Luxembourg legislation. (For details on the law, see EY Global Tax Alert, Luxembourg enacts tax transparency rules for digital platforms, makes other changes regarding administrative cooperation in tax matters, dated 2 June 2023.)

The Draft Law would extend the existing DAC7 reporting and exchange of information framework beyond European Union (EU) Member States by implementing the exchange relationships provided under the Organisation for Economic Co-operation and Development (OECD) Multilateral Competent Authority Agreement on the Automatic Exchange of Information on Income Derived through Digital Platforms (DPI MCAA) (see EY Global Tax Alert, OECD publishes international exchange framework and optional module for Model Reporting Rules for sellers in the sharing economy, dated 30 June 2021). As a result, Platform Operators would be required to apply similar due diligence, reporting and information exchange requirements to sellers residing in participating non-EU jurisdictions as they already apply to sellers residing in the EU.

In this context, the Draft Law distinguishes between jurisdictions applying only the OECD core reporting framework and those applying a broader reporting scope equivalent to DAC7. The scope of reportable sellers and activities depends on the jurisdiction.

The proposed amendments would apply from 1 January 2027.

Background 

Luxembourg implemented DAC7 through the law of 16 May 2023, introducing reporting obligations for digital platform operators and providing for the automatic exchange of information within the EU on sellers carrying out activities through digital platforms.

Luxembourg signed the DPI MCAA on 21 October 2022. The Government now proposes to extend the reporting and exchange framework to certain non-EU jurisdictions that have activated exchange relationships with Luxembourg under that agreement.

The stated objective, as set out in the explanatory statement accompanying the Draft Law, is to enable the collection, reporting and automatic exchange of information relating to income earned through digital platforms not only within the EU but also with participating non-EU jurisdictions.

Draft Law details

Different reportable activities depending on jurisdiction

To accommodate the OECD framework, the Draft Law would introduce three new jurisdictional concepts: Extended Reportable Jurisdictions, Reportable Jurisdictions and Partner Jurisdictions. This distinction reflects the OECD DPI framework, under which participating jurisdictions may apply different levels of reporting. Which sellers fall within the reporting obligations (Reportable Seller) would depend both on the seller's jurisdiction of residence and on the type of activity carried out through the platform.

Extended Reportable Jurisdictions would include Luxembourg, all EU Member States and any other participating jurisdiction that exchanges information on all four categories of relevant activities covered by DAC7, namely rental of immovable property, personal services, sale of goods and rental of means of transport.

Reportable Jurisdictions would refer to participating jurisdictions that apply only the OECD core reporting framework. In this case, the exchange of information would be limited to income derived from personal services and immovable property rentals.

Partner Jurisdictions would broadly cover jurisdictions that either exchange information with Luxembourg or receive information from Luxembourg under the DPI MCAA. The concept is used throughout the Draft Law for purposes such as exchanging information and delegating reporting obligations between platform operators.

A Grand-Ducal Regulation would list jurisdictions forming part of Reportable Jurisdictions, Extended Reportable Jurisdictions or Partner Jurisdictions.

Delegation of reporting obligations

The Draft Law also introduces provisions governing cases in which a Reporting Platform Operator either delegates its reporting obligations to another Reporting Platform Operator located in a Partner Jurisdiction or assumes the reporting obligations of another Reporting Platform Operator located in a Partner Jurisdiction. In such cases, the Luxembourg tax authorities would communicate identifying information on the Reporting Platform Operator that assumes the reporting obligations to the competent authority of the relevant Partner Jurisdiction.

In addition, the Draft Law clarifies the circumstances under which a Luxembourg Platform Operator may rely on reporting performed by another Platform Operator established in a Partner Jurisdiction. However, Luxembourg Reporting Platform Operators generally could not delegate information reporting on Luxembourg-resident sellers to a non-EU operator.

Entry into force

The Draft Law would become applicable from 1 January 2027.

Next steps and implications

The Draft Law will now proceed through the Luxembourg legislative process and may still be amended before adoption.

Platform Operators should monitor the legislative process and assess whether their due diligence and reporting processes will need to be adapted for sellers that reside in participating non-EU jurisdictions from 2027.