Luxembourg-San Marino Tax Treaty: Three-Year MAP Expiry Deleted

A notice in Luxembourg’s official journal, Memorial A No. 502 of 23 October 2026, confirms that the avenant amending the Luxembourg-San Marino tax treaty entered into force on 16 September 2026. The instrument, signed at Luxembourg on 14 May 2025, makes a single change to the 2006 double taxation convention: it deletes the sentence in Article 25(2) under which a mutual agreement procedure (MAP) expired at the end of the third year following the year in which the taxpayer presented the case.

That sentence put a fixed end date on the competent authorities’ negotiation of a double taxation dispute between the two States. On a literal reading the deletion reaches tax years beginning on or after 1 January 2027, so tax and reporting teams need to know which open cases keep the old end date, which deadlines are unchanged, and what a Luxembourg MAP request must contain.

Related reading: Hong Kong-Slovenia Double Tax Agreement: Lower Withholding

What the avenant deletes from Article 25(2)

Article 1 of the avenant strikes one sentence from Article 25(2) (Mutual Agreement Procedure). In the English text, equally authentic with the French and Italian versions, it reads: “The mutual agreement procedure shall expire by the end of the third year following that in which the case was presented by the tax payer.” Article 2 covers ratification and entry into force. No other article of the convention or its 2006 protocol is rewritten, so withholding rates, the exchange of information clause and the refund article stay as they were.

The rest of Article 25(2) survives: where the objection appears justified and the competent authority cannot solve the case by itself, it endeavours to resolve it by mutual agreement with the other State, and any agreement reached is implemented notwithstanding domestic time limits.

Luxembourg’s explanatory memorandum to bill 8666 places the change under BEPS Action 14 on dispute resolution and describes it as aligning the clause with the latest OECD Model Tax Convention. The government’s commentary adds that the OECD Model sets no time limit for concluding a MAP. The Council of State raised no substantive observation in its opinion of 20 January 2026.

Case files can trip on the name. The Luxembourg approval law and the journal notice say avenant; the instrument’s own operative text, the San Marino ratification decree and the ACD’s treaty table say protocol. Both labels mean the instrument of 14 May 2025. The protocol signed in Rome on 18 September 2009, which the ACD lists as amending Articles 24, 25 and 26 from 1 January 2012, is a separate, earlier amendment.

Luxembourg-San Marino tax treaty dates, from signature to first affected tax year

Entry into force and effect are separate dates. Article 2(2) brings the avenant into force on the date of the last diplomatic notification and gives it effect for tax years beginning on or after 1 January of the following calendar year. The journal notice states that the conditions for entry into force were met on 16 September 2026 (“ayant été remplies le 16 septembre 2026”) and that the avenant entered into force for both Contracting Parties on that date. Counting from 2026 gives 1 January 2027; the notice itself does not state that date.

The ACD’s treaty table was last updated on 23 July 2026 and at that point listed the 2025 protocol as not applicable. The journal notice is the later record.

Open MAP cases and pre-2027 tax years

The avenant has no transitional rule for pending cases. The deleted sentence counted from the year the taxpayer presented the case, while the effect clause counts by tax year. On the old wording, a case presented in 2025 would expire at the end of 2028, counting three years from the presentation year.

Read literally, Article 2(2) applies the deletion to tax years beginning on or after 1 January 2027, and a dispute about 2024, 2025 or 2026 falls before that line. A working assumption is that such a case may still be treated as subject to the three-year end point. The competent authorities could read it differently, and neither the bill file nor the journal notice addresses the point. On the tax-year reading, the deletion mainly affects disputes concerning tax years beginning in 2027 or later.

Under Article 25(1) and ACD Circular No. 60, point 3.1, a MAP request may rest on a sufficiently precise measure that is expected to result in taxation contrary to the convention, so it can be filed before an assessment issues.

Article 25(5) arbitration is untouched. It covers only a case presented because taxation contrary to the convention has already resulted. Where the competent authorities cannot agree within two years from presentation of the case to the other State’s competent authority, unresolved issues go to arbitration if the person requests it, unless a court or administrative tribunal of either State has already decided them. The paragraph leaves the mode of application to a mutual agreement between the competent authorities, so whether that arrangement exists is worth asking before relying on the route.

A San Marino case record can carry both dates: a provisional expiry date under the previous wording for cases about 2026 or earlier years, and the two-year arbitration trigger. A written question to the ACD can ask which governs a given file.

The presentation deadline and the Luxembourg request file

The deadline for presenting a case is unchanged, but the text a team reads matters. The coordinated convention annexed to bill 8666 shows Article 25(1) with a two-year window from first notification of the action. The ACD’s synthesised text of 11 February 2021, prepared with both competent authorities, shows that sentence replaced by the MLI Article 16(1) wording: three years from first notification of the action resulting in taxation not in accordance with the convention. That document states that the authentic legal texts prevail and that MLI provisions take effect on their own dates.

San Marino’s MLI position, deposited on 11 March 2020, reserves under Article 35(6) that Article 35(4) does not apply to its covered tax agreements, and lists the Luxembourg convention (no. 12) as one whose Article 25(1) second sentence sets a period shorter than three years. For the Luxembourg convention, the three-year window therefore applies to taxable periods beginning on or after 1 January 2021 (the date shown in the ACD synthesised text for other taxes), and earlier periods keep the two-year window.

Luxembourg’s Circular L.G.-Conv. D.I. No. 60 of 11 March 2021 requires the request to name the convention and its MAP article. Point 2.1 then lists ten items, among them the tax years in issue, the articles said to be misapplied, the facts with copies of assessments or proposed adjustments, and statements on whether the case has also gone to San Marino, whether a ruling, advance pricing agreement or judgment covers it, and whether an appeal has been or will be filed in Luxembourg or abroad.

The ACD’s MAP page, last updated 1 July 2024, directs requests to the ACD management committee for any case, the economic division for transfer pricing cases, or the international relations division for other cases, at 33, rue de Gasperich, L-5826 Hesperange. The 2021 circular still gives 45, boulevard Roosevelt, L-2982 Luxembourg, so a cover letter copied from the circular carries a different address.

A taxpayer that wants a domestic appeal decided first can file a protective MAP request under point 3.2 of the circular. The competent authority acknowledges it, confirms where applicable that the deadline was met, and does nothing further until the taxpayer asks it to proceed.

Luxembourg conditions on implementing a San Marino agreement

Point 3.6 of the circular makes any solution that changes Luxembourg tax subject to two conditions: the requesting taxpayer approves it and waives all legal remedies in Luxembourg and abroad on the matter settled. The notification sets the period for acceptance and proof of the waiver.

Luxembourg applies the treaty’s notwithstanding-time-limits rule asymmetrically. Downward adjustments are made whatever the domestic time limits; upward adjustments remain possible only within domestic limitation periods. The same point notes that where a convention has no binding arbitration, the competent authorities may close a MAP without agreement. For a San Marino case presented because taxation contrary to the convention has already resulted, Article 25(5) arbitration is available on request, subject to the court-decision exclusion and the implementing arrangement above.

Exchange of information and account reporting run on separate tracks

Article 26 on exchange of information is unchanged. Financial-account reporting on San Marino residents rests on a different basis: the ACD lists the EU’s agreement with San Marino on automatic exchange of financial account information as its own source of exchange flows, separate from the bilateral treaties. That cycle is covered in our guide to CRS reporting in Luxembourg, and the avenant does not touch it.

Under Article 28, withholding tax refund claims follow the time limits of the refunding State and need an official declaration from the State of residence that the taxpayer meets the treaty conditions. The ACD synthesised text also records the MLI principal purpose test as applying to treaty benefits. EU-level reform of withholding relief is a separate project, covered in our article on FASTER Directive market capitalisation data and securities scope.

Frequently Asked Questions

Can Luxembourg suspend tax collection while a San Marino MAP case is pending?

Point 5 of the circular ties suspension of enforcement to paragraph 251 of the General Tax Law (AO), available only where the taxpayer has filed a formal objection with the competent tax office; a MAP request alone does not ground it. Interest and penalties sit outside the MAP, but where a MAP cancels or reduces the tax, directly linked interest and penalties are in principle cancelled or reduced proportionally.

Does the EU tax dispute resolution law give a San Marino case an alternative route?

The Law of 20 December 2019 transposed Directive (EU) 2017/1852 for disputes between EU Member States. San Marino is outside the EU, so a Luxembourg-San Marino dispute runs under Article 25 of the treaty, including the Article 25(5) arbitration clause for cases where taxation contrary to the convention has already resulted.

Will a letter asking Luxembourg for a withholding tax refund open a MAP?

Point 2.1 of the circular states that a request labelled simply as a refund claim does not presuppose an intention to open a MAP. A team that wants the treaty procedure has to say so, citing the convention and Article 25; the Article 28 refund claim is a separate filing.

Related Articles

• Hong Kong-Slovenia Double Tax Agreement: Lower Withholding: how a newly signed treaty’s lower withholding rates wait for ratification and later effective dates.
• CRS Reporting in Luxembourg: legal basis, due diligence, annual filing, nil returns and penalties for Luxembourg financial institutions.
• FASTER Directive Market Capitalisation Data: Securities Scope: which EU withholding markets must adopt harmonised relief procedures.

Sources and References

• Memorial A No. 502 (23 October 2026), entry-into-force notice: Legilux HTML text and PDF
• Law of 10 March 2026 with the avenant text, Memorial A No. 130 (16 March 2026): Legilux ELI, HTML text and PDF
• Bill 8666 consolidated file, Chamber of Deputies: 8666 Dossier Complet
• Finance Committee report on bill 8666 (30 January 2026): Committee report
• San Marino Decreto Consiliare No. 120 (26 September 2025), with English and Italian texts: Consiglio Grande e Generale
• ACD synthesised text, MLI and Luxembourg-San Marino convention (11 February 2021): ACD PDF
• Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, Articles 16 and 35: OECD MLI text
• San Marino MLI position deposited on 11 March 2020, including the Article 35(6) reservation: OECD depositary document
• Council Directive (EU) 2017/1852 on tax dispute resolution mechanisms in the European Union: EUR-Lex
• Law of 20 December 2019 establishing a tax dispute resolution mechanism (scope: Article 1): Legilux HTML text
• ACD table of Luxembourg tax conventions: impotsdirects.public.lu
• ACD Circular L.G.-Conv. D.I. No. 60 (11 March 2021): ACD PDF
• ACD mutual agreement procedure page: impotsdirects.public.lu
• ACD list of 2026 laws affecting direct taxation: impotsdirects.public.lu
• ACD international exchanges and data protection page: impotsdirects.public.lu
• Luxembourg Government tax transparency dossier: gouvernement.lu

San Marino MAP files before 1 January 2027

The deletion reaches its first tax year on 1 January 2027, and the published texts do not say how earlier years will be treated. The immediate deliverable is a dated register of open or planned Luxembourg-San Marino MAP cases showing the affected tax years, presentation and first-notification dates, any provisional expiry date under the previous Article 25(2), the two-year arbitration trigger, the applicable presentation deadline and any written competent-authority confirmation of how the amendment applies to pending cases and pre-2027 tax years.

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