Luxembourg response to COVID-19: Extensions for Accounting Obligations

Luxembourg parliament has recently adopted two new laws to provide headroom to operating businesses and funds in respect of their accounting obligations.

The extensions granted under these new laws will only apply to filings and publications that (i) were not due before the declaration of state of crisis for a three month period in Luxembourg (i.e., 18 March 2020) and (ii) relate to periods ended before the end of such state of crisis.

I. Extension of certain deadlines of sector specific laws of the financial sector during the state of crisis

The law of 12 May 2020 extending certain deadlines of sector specific laws of the financial sector during the state of crisis (the “Sector Specific Law”) introduces the extension of certain deadlines for various obligations relating to filings and provision of periodic reports for Luxembourg undertakings of the financial sector by a period of three months. As per the introductory foreword of the preparatory work of the Sector Specific Law, it is anticipated that numerous companies will encounter difficulties to meet their filing obligations due to the pandemic and the lock-down circumstances.

The Sector Specific Law was published on 12 May 2020 and entered into force on the same day.

The table below summarises the obligations that fall within the scope of the Sector Specific Law and the relevant extensions that will apply:

II. Extension of deadlines for the filing and publication of annual accounts, consolidated accounts and related report during the state of crisis

To the exception of special limited partnerships (SCSp), the management bodies of Luxembourg commercial companies must submit annual accounts for approval by the shareholders/partners within six months from the end of the financial year, and file such approved accounts within one month from their approval with the RCS. Most companies having financial years which follow the calendar year (i.e. 1 January to 31 December), will therefore have until end of July at the latest to proceed with such filings.

Given the current state of crisis and the global pandemic context, the Luxembourg legislator finds it appropriate to extend such deadlines so as to anticipate significant difficulties that commercial companies may face in the coming months.

The law voted on 12 May 2020 extending deadlines for the filing and publication of annual accounts, consolidated accounts and related report during the state of crisis (the ”Filing Deadline Extension Law”) therefore introduces an extension by a period of three months of the following filing obligations for all commercial companies (to the extent applicable):

1. The filing and publication of the annual accounts and related reports;
2. The filing and publication of consolidated accounts and related reports;
3. The filing of the reports on payment to government entities.

Additionally, the Filing Deadline Extension Law provides that the annual general meeting of Luxembourg undertakings can be convened at a date falling within nine months from the end of its financial year, effectively extending the deadline for the approval of such annual accounts by the shareholders by three months. For undertakings having financial years which follow the calendar year (i.e. 1 January to 31 December), they will therefore have until end of September to have the annual accounts approved by the annual general meeting and until end of October to proceed with the filing of such accounts with the RCS.

Luxembourg law provides criminal sanctions applicable for the members of the management bodies which would fail to submit the annual accounts to the shareholders for approval within the legal deadline of six months and/or to file such accounts with the RCS within one month from approval. These deadlines are also expressly extended by three months by the Filing Deadline Extension Law.

The Filing Deadline Extension Law is expected to be published in the coming weeks in the Official Gazette and will come into force on the same day.

The Filing Deadline Extension Law is to be read in conjunction with the greater flexibility granted by the Luxembourg legislator for board members and shareholders/partners to attend corporate meetings remotely (read our alert here).

In addition to the above, the RCS has granted an administrative extension of up to four months for the filing of annual accounts, during which no late filing fee would be applied.

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