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Economy and Banking Sector of Luxembourg

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Luxembourg: 0.0 - 15.0%

Withholding tax rates applied on payments of interest and dividends in Luxembourg are shown in Table 1.

Dividends Interest
Natural person, resident 0.0 %10.0 %
Natural person, non-resident 15.0 %0.0 %
Table 1. Withholding tax rates in Luxembourg.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Luxembourg: 79 Signed Agreements

Luxembourg signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Armenia
 Austria
 Azerbaijan
 Bahrain
 Barbados
 Belgium
 Brazil
 Bulgaria
 Canada
 China
 Czech Republic
 Denmark
 Estonia
 Finland
 France
 Georgia
 Germany (Sep 2013)
 Greece
 Guernsey (Aug 2014)
 Hong Kong
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Israel
 Italy
 Japan
 Kazakhstan (Dec 2013)
 Korea, Republic of
 Lao People's Democratic Republic (Mar 2014)
 Latvia
 Liechtenstein
 Lithuania
 Macedonia (Jul 2013)
 Malaysia
 Malta
 Mauritius
 Mexico
 Moldova, Republic of
 Monaco
 Mongolia
 Morocco
 Netherlands
 Norway
 Panama
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 San Marino
 Seychelles (Aug 2013)
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sri Lanka (Apr 2014)
 Sweden
 Switzerland
 Tajikistan (Jul 2013)
 Thailand
 Trinidad and Tobago
 Tunisia
 Turkey
 United Arab Emirates
 United Kingdom
 United States
 Uzbekistan
 Vietnam

There are also several agreements between Luxembourg and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Albania
 Czech Republic (Mar 2013)
 Isle of Man (Apr 2013)
 Jersey (Apr 2013)
 Kuwait
 Saudi Arabia (May 2013)
 Sierra Leone (Oct 2013)
 Ukraine

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Automatic Exchange: Starts in September 2017

Luxembourg signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 58 Bilateral Agreements to Receive Information

Luxembourg has signed bilateral agreements with 58 jurisdictions to automatically receive information:

 Andorra
 Argentina
 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Brazil
 Bulgaria
 Canada
 China
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 United Kingdom
 Uruguay

Automatic Excnange: 70 Bilateral Agreements to Send Information

Luxembourg has signed bilateral agreements with 70 jurisdictions to automatically send information:

 Andorra
 Anguilla
 Argentina
 Australia
 Austria
 Belgium
 Belize
 Bermuda
 Bonaire, Saint Eustatius and Saba
 Brazil
 British Virgin Islands
 Bulgaria
 Canada
 Cayman Islands
 China
 Colombia
 Costa Rica
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Montserrat
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turks and Caicos Islands
 United Kingdom
 Uruguay

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Luxembourg
IGA in effect since 28 March 2014, Model 1

Luxembourg has FATCA agreement with the U.S. in effect since 28 March 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Luxembourg are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Luxembourg financial accounts hold in U.S. financial institutions will be reported to Luxembourg authorities.

Further Information