FATCA and CRS compliance and data protection compliance are not separate workstreams. They apply to the same data, the same individuals, and the same processes. And this is not exclusively a European issue. While GDPR is the most developed framework, equivalent obligations exist across jurisdictions, from Jersey to Bermuda and beyond. Financial institutions operating across borders need to consider the applicable data protection framework in every relevant context, not only where they are established.

A common assumption is that no reportable accounts means no filing obligation under CRS. In Luxembourg, this is incorrect, and the ACD has been enforcing the nil return requirement with penalties of up to 10,000 euros for late or non-filing. For dormant entities, holding companies, and special purpose vehicles, this is an easily overlooked obligation with real financial consequences.

Tax practitioners working with international fund structures will occasionally encounter a trust with no named beneficiaries and no identifiable beneficial owner in the traditional sense. Before concluding that something is missing, it is worth asking a more fundamental question: what type of trust is this? Purpose trusts are common in BVI and Bermuda structures, largely unknown in Luxembourg, and they require a different analytical approach under CRS than any other trust type.

In a Luxembourg fund structure, the practical work of CRS reporting is typically performed by the transfer agent or the management company. This is a sensible and legitimate arrangement. The question is not whether delegation is appropriate. The question is what governance sits above it, and whether directors are asking the right questions before signing off on a filing that goes to a tax authority in the name of the fund.

Luxembourg does not have a domestic trust law. For most Luxembourg practitioners, the trust is a foreign concept encountered only when it appears in the ownership chain of an international structure. That is precisely where the CRS controlling person classification challenge begins, and where errors are most commonly made. Not all trusts are the same, and the type of trust determines everything.