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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 Persons (residents) 0.0 %10.0 %
Natural Persons (non-residents) 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:

AM Armenia
AT Austria
AZ Azerbaijan
BH Bahrain
BB Barbados
BE Belgium
BR Brazil
BG Bulgaria
CA Canada
CN China
CZ Czech Republic
DK Denmark
EE Estonia
FI Finland
FR France
GE Georgia
DE Germany
GR Greece
GG Guernsey
HK Hong Kong
HU Hungary
IS Iceland
IN India
ID Indonesia
IE Ireland
IL Israel
IT Italy
JP Japan
KZ Kazakhstan
KR Korea, Republic of
LA Lao People's Democratic Republic
LV Latvia
LI Liechtenstein
LT Lithuania
MK Macedonia
MY Malaysia
MT Malta
MU Mauritius
MX Mexico
MD Moldova, Republic of
MC Monaco
MN Mongolia
MA Morocco
NL Netherlands
NO Norway
PA Panama
PL Poland
PT Portugal
QA Qatar
RO Romania
RU Russian Federation
SM San Marino
SC Seychelles
SG Singapore
SK Slovakia
SI Slovenia
ZA South Africa
ES Spain
LK Sri Lanka
SE Sweden
CH Switzerland
TJ Tajikistan
TH Thailand
TT Trinidad and Tobago
TN Tunisia
TR Turkey
AE United Arab Emirates
GB United Kingdom
US United States
UZ Uzbekistan
VN Vietnam

There are also several agreements between Luxembourg and other jurisdictions which were signed but haven't yet come into force:

AL Albania
CZ Czech Republic
IM Isle of Man
JE Jersey
KW Kuwait
SA Saudi Arabia
SL Sierra Leone
UA 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:

AD Andorra
AR Argentina
AU Australia
AT Austria
BE Belgium
BQ Bonaire, Saint Eustatius and Saba
BR Brazil
BG Bulgaria
CA Canada
CN China
CO Colombia
HR Croatia
CY Cyprus
CZ Czech Republic
DK Denmark
EE Estonia
FO Faroe Islands
FI Finland
FR France
DE Germany
GI Gibraltar
GR Greece
GL Greenland
GG Guernsey
HU Hungary
IS Iceland
IN India
IE Ireland
IM Isle of Man
IT Italy
JP Japan
JE Jersey
KR Korea, Republic of
LV Latvia
LI Liechtenstein
LT Lithuania
MY Malaysia
MT Malta
MU Mauritius
MX Mexico
MC Monaco
NL Netherlands
NZ New Zealand
NO Norway
PL Poland
PT Portugal
RO Romania
SM San Marino
SC Seychelles
SG Singapore
SK Slovakia
SI Slovenia
ZA South Africa
ES Spain
SE Sweden
CH Switzerland
GB United Kingdom
UY Uruguay

Automatic Excnange: 70 Bilateral Agreements to Send Information

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

AD Andorra
AI Anguilla
AR Argentina
AU Australia
AT Austria
BE Belgium
BZ Belize
BM Bermuda
BQ Bonaire, Saint Eustatius and Saba
BR Brazil
VG British Virgin Islands
BG Bulgaria
CA Canada
KY Cayman Islands
CN China
CO Colombia
CR Costa Rica
HR Croatia
CY Cyprus
CZ Czech Republic
DK Denmark
EE Estonia
FO Faroe Islands
FI Finland
FR France
DE Germany
GI Gibraltar
GR Greece
GL Greenland
GG Guernsey
HU Hungary
IS Iceland
IN India
ID Indonesia
IE Ireland
IM Isle of Man
IT Italy
JP Japan
JE Jersey
KR Korea, Republic of
LV Latvia
LI Liechtenstein
LT Lithuania
MY Malaysia
MT Malta
MU Mauritius
MX Mexico
MC Monaco
MS Montserrat
NL Netherlands
NZ New Zealand
NO Norway
PL Poland
PT Portugal
RO Romania
LC Saint Lucia
VC Saint Vincent and The Grenadines
WS Samoa
SM San Marino
SC Seychelles
SG Singapore
SK Slovakia
SI Slovenia
ZA South Africa
ES Spain
SE Sweden
CH Switzerland
TC Turks and Caicos Islands
GB United Kingdom
UY 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