Global Tax Alert | 16 July 2013

Luxembourg expands tax treaty network

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With the recent signature of new double tax treaties with the Czech Republic, Guernsey, Jersey, Isle of Man, Saudi Arabia and Taiwan, and the ratification of double tax treaties with Germany (new treaty), Kazakhstan, Laos, Macedonia, Seychelles, Sri Lanka and Tajikistan, Luxembourg reinforced its extensive double Tax Treaty network. The new treaties were ratified on 16 May 2013 and the law published on 4 July 2013. They all contain provisions on exchange of information in line with OECD standards.

In addition, protocols to the existing tax treaties with Canada, Italy, Malta, Poland, Republic of Korea (Korea), Romania, Russia and Switzerland were ratified. The protocols amend the provisions on the exchange of information contained in the relevant treaties to bring them in line with OECD standards. The protocols with Korea, Poland and Russia also contain some additional amendments to the relevant treaties.

Details of the treaty with Saudi Arabia are not yet available.

In addition treaties with Botswana, Brunei, Estonia, Hungary (new treaty), Serbia and Singapore (new treaty) were initialed during the last months.

At the same time, by a law dated 2 November 2012, Mongolia terminated the Luxembourg-Mongolia Income and Capital Tax Treaty of 1998. As a result, as from 1 January 2014 the treaty will no longer be applicable and the treaty protection regarding capital gains realized by Luxembourg residents upon the sale of Mongolian assets will no longer be available. Consequently, existing holding structures should be reviewed to determine whether any action should be taken before the effective date of termination.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP, Luxembourg Tax Desk, New York
  • Jurjan Wouda Kuipers
    +1 212 773 6464
    jurjan.woudakuipers@ey.com
  • Lea Boudoux
    +1 212 773 5957
    lea.boudoux@ey.com
  • Hermann Schomakers
    +1 212 773 2985
    hermann.schomakers@ey.com
Ernst & Young LLP, EMEIA Financial Services Luxembourg Tax Desk, New York
  • Raffaele Gargiulo
    +1 212 773 3505
    raffaele.gargiulo@ey.com
Ernst & Young LLP, Luxembourg Tax Desk, Chicago
  • Alexandre J. Pouchard
    +1 312 879 3007
    alexandre.pouchard@ey.com
  • Stephanie Viot
    +1 312 879 4275
    stephanie.viot@ey.com
Ernst & Young LLP, Luxembourg Tax Desk, San Jose
  • Xavier Picha
    +1 408 918 5880
    xavier.picha@ey.com

EYG no. CM3635