Luxembourg Administrative Tribunal interprets notification and motivation requirements for ex officio tax assessments

Factual background

The case concerned a Luxembourg company that failed to file its 2020 corporate income tax, municipal business tax and net wealth tax returns.

After several reminders and a formal injunction that required the company to file under penalty of a coercive fine, the tax office issued ex officio assessments for corporate income tax, municipal business tax, unit value and net wealth tax under § 217 AO.

The company filed its 2020 tax return only after the tax office had issued the ex officio assessments. The tax office acknowledged receipt but declined to amend them because it considered them final under § 94 AO.

The company then claimed that it had not received the assessments and requested copies. It subsequently challenged them before the Director, who declared the claim inadmissible because it was late. The company appealed that decision to the Administrative Tribunal.
 

No sufficient evidence to rebut the presumption of notification

The tribunal first considered whether the company had successfully rebutted the presumption that it received valid notification of the assessments shortly after the tax office issued them.

Under Luxembourg direct tax procedure, the tax office may notify taxpayers of certain assessments by ordinary post. The law then presumes notification on the third working day after posting, unless the circumstances make it plausible that the taxpayer did not receive the document within that period.

The company argued that it had never received the assessments. It relied in particular on its filing of the 2020 return in August 2023, well after the assessments had been issued, which it said showed that it could not have known about them. It also claimed that only “non-automated” correspondence from the tax authorities reached it, while “standardized” or “automated” mailings, such as tax assessments and account statements, did not.

The tribunal rejected these arguments.

First, the tribunal held that filing a tax return late does not, in itself, seriously indicate that earlier ex officio assessments were not received. Accepting that argument would undermine the ex officio taxation mechanism and effectively neutralize the statutory claim deadline: a taxpayer could simply file late and allege non-receipt to reopen an expired appeal period.

Second, the tribunal found no credible or tangible evidence for the alleged distinction between automated mailings that did not reach the company and other correspondence that did. The tax authorities had sent numerous communications to the same registered office—including reminders, the injunction, the notice of the fine, the four disputed assessments and the account statement, and none came back as undeliverable.

The tribunal also considered the company’s internal mail-handling arrangements. The signatories of its September 2023 letter both lived in the United Kingdom, casting doubt on the claim that mail was collected weekly, or even twice weekly, from its Luxembourg registered office. The company’s later request for duplicate tax correspondence to be sent to a third party in Luxembourg reinforced that conclusion.

The tribunal therefore concluded that the company had not established a “convergent set of circumstances” capable of rebutting the presumption of notification. The law presumed that the company received the assessments from 19 April 2023 on 24 April 2023, so the three-month claim period expired on 24 July 2023. Filing a tax claim after this date was thus late.
 

Formal motivation requirements depend on the factual context

The tribunal next considered whether the ex officio assessments lacked sufficient formal motivation, such that the claim period had never started to run.

The company relied on § 211(2) AO and argued that the assessments did not explain on what basis the tax office had determined the taxable amounts. In particular, it maintained that the mere statement that the income had been taxed pursuant to § 217 AO due to the absence of a return was too generic to amount to proper reasoning.

The tribunal acknowledged the case law of the Administrative Court according to which § 211(2) AO imposes a formal obligation to state the bases of assessment, and that this obligation is not satisfied by abstract or formulaic references alone where more specific reasoning is required. The tribunal also recalled that failure to comply with these formal requirements prevents the claim deadline from starting to run.

However, the tribunal drew an important distinction depending on whether the tax office had access, at the time of issuing the assessment, to annual accounts or similar accounting data for the relevant year.

When a taxpayer has already filed annual accounts for the relevant period or provided them to the tax office, formal motivation is required and the tax authorities must give more detailed reasons. They should indicate, at least in summary, the nature and amount of the taxable income retained, confirm that they made the assessment ex officio, identify the information which they relied on and, where relevant, explain why they departed from specific accounting entries.

By contrast, when a taxpayer neither files a return nor publishes or submits annual accounts for the relevant year, it deprives the tax office of the information it needs to calculate the tax base precisely. The tax office must therefore estimate the tax base. In those circumstances, the tribunal held that the assessment need only state the nature and amount of taxable income retained and indicate that the assessment was made by way of ex officio taxation.

That was the factual context in the present case. The company had not filed its 2020 return before the tax office issued the assessments, and it filed its 2020 annual accounts with the Luxembourg Trade and Companies Register only on 9 June 2023, after the tax office had issued and notified the assessments. Because the tax office had no contemporaneous accounts when it assessed the company on 19 April 2023, it did not have to specify the source of information used for its estimate.

The tribunal therefore found no breach of the formal motivation rules in § 211(2) AO. Any discrepancy between the estimated tax bases and the figures that the company later reported in its 2020 accounts concerned the substantive correctness of the assessments, not their formal validity or the start of the appeal period.

Substantive criticisms of the ex officio taxation were irrelevant

The company also challenged the ex officio taxation itself, arguing that the estimated tax bases were excessive and that the tax office had misapplied § 217 AO.

The tribunal dismissed those arguments as irrelevant to the procedural issue before it. Because the Director had declared the claim inadmissible as late without ruling on the merits of the assessments, the tribunal considered only whether that inadmissibility decision was well founded. It did not examine the substantive correctness of the ex officio taxation.
 

Key takeaway

The judgment of the tribunal in case No. 50366, which is currently under appeal before the Administrative Court, held that taxpayers face a high threshold when seeking to rebut the presumption of notification of direct tax assessments sent by ordinary post. Mere assertions of non-receipt, even coupled with later filing behavior, were held not to be sufficient absent concrete and coherent factual evidence.

The decision is also noteworthy for ruling that the scope of the formal motivation requirement for ex officio assessments depends on the information available to the tax office when the assessment is issued. Where no return and no annual accounts have been submitted for the relevant year, the tribunal held that the tax office is not required to identify in the assessment the source of information used for its estimate; indicating the type and amount of the tax base retained, together with the fact that taxation was made under § 217 AO, is sufficient.

More broadly, the case underscores the strict procedural deadlines that apply in Luxembourg tax matters. Taxpayers that do not monitor correspondence sent to their registered office or respond promptly to ex officio assessments risk losing the opportunity to challenge them on the merits.