Double tax treaties in Luxembourg

Luxembourg is a country based on a dynamic and open economy that promotes the development of cross – border trade and investments.

In order to create a business environment in Luxembourg for foreign investors and companies, the country has signed double tax treaties with more than 70 countries and others are still pending for approval. This convention for the avoidance of double taxation is very advantageous for foreign investors. Double tax treaties were signed with most industrialized countries and with all of the stated of the European Union. These treaties are constantly negotiated and updated according to the latest international standards.

The model used for double tax treaties in Luxembourg is in line with the provisions of the Organization of Economic Cooperation and Development – OECD and the most important goal of the treaties is to eliminate double taxation for the same legal entity or for the same individual. Signing a double tax treaty implies that the Contracting states decide which one of them will levy a certain tax on the income produced therein.

The double tax treaties cover regulations regarding withholding taxes on dividends, royalties and capital gains. While both countries impose a certain tax rate for these types of income, under an agreement, this type of tax will be significantly reduced in some cases or even completely eliminated in others. Other types of taxes included in double tax treaties are the corporate tax, the income tax, the wealth tax, the communal business tax and other taxes as well.

Special provisions included in double tax treaties allow the prevention of tax discrimination as well as the prevention of tax evasion. There are also special rules involved in the exchange of information between countries that have signed double tax treaties with Luxembourg.

Luxembourg tax treaties have the same purpose as most bilateral agreements, are designed to address specific economic context for each country.

Countries that have signed double tax treaties with Luxembourg

Luxembourg has signed double tax treaties with countries in Europe, Africa and Asia, as well as with countries in North America and South America. The countries included on this list are the following: Armenia, Austria, Azerbaijan, Bahrain, Barbados, Belgium, Brazil, Bulgaria, Canada, china, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Guernsey, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Kazakhstan Laos, Latvia, Liechtenstein, Lithuania, Macedonia, Malaysia, Malta, Mauritius, Mexico, Moldova, Monaco, Morocco, the Netherlands, Norway, Panama, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Tajikistan, Thailand, Trinidad & Tobago, Tunisia, Turkey, United Kingdom, United Arab Emirates, USA, Uzbekistan and Vietnam. 

Other countries that have pending double tax treaties with Luxembourg are Albania, Andorra, Argentina, Botswana, Brunei, Croatia, Cyprus, Egypt, Kyrgyzstan, Kuwait, Lebanon, New Zeeland, Oman, Pakistan, Senegal, Serbia, Syria, Ukraine and Uruguay.

Asides from double tax treaties, Luxembourg has also signed financial protocols on exchange of information upon request with various countries.

The Luxembourg double tax treaties network is constantly expanding due to the country’s policies to establish profitable business partnerships with foreign investors and to further develop its open economy.