Double Tax Treaties in Luxembourg

 

The economic collaboration between Luxembourg and the UAE dates for many years and a double taxation treaty signed by both countries strengthened the business relations in varied sectors of interest. The agreement applies to the wealth tax, income tax, communal tax imposed on commercial profits and the corporate tax in the case of Luxembourg. As for the UAE, the DTT covers the corporate and personal income tax. More than that, it is important to know that there is no withholding tax imposed on interests, royalties, and dividends in the case of the UAE. A withholding tax of 15% rate is not applicable if the parent company established in Luxembourg is a resident company in UAE. Branches of companies from the UAE that are established in Luxembourg might be subject to a 5% or 10% withholding tax rate under particular conditions. All the provisions of the double taxation agreement signed between Luxembourg and the UAE can be explained by one of our company formation agents in Luxembourg who can also help you register a company in Luxembourg.

 

 

The protection of business collaborators and economic partners is important for Luxembourg, and a double taxation treaty that was first signed in 1958 met a series of modifications and updates in terms of provisions. Among these, the withholding tax is reduced from a 10% rate to a 5% rate if the company is a German resident. The agreement signed by Luxembourg and Germany also mentions the protection of the corporate tax, the wealth tax, and the income tax that is applicable to resident companies of both states. More details and information about the double taxation treaty signed by Luxembourg and Germany can be obtained from one of our specialists. You can also ask us about how to set up a fund or about how to open a SARL in Luxembourg.

 

 

 

The capital gains tax, the corporate tax, the income tax, the development land tax, and the petroleum revenue tax are protected by the double tax treaty signed by Luxembourg and UK, for British companies. We mention that UK companies with establishments in Luxembourg (office buildings, factories, subsidiaries, branches, construction sites) will only be taxed in Luxembourg for the profits generated in this country. The same thing is available to Luxembourg companies registered in the United Kingdom. Furthermore, the provisions of the agreement signed by Luxembourg and UK mention that the royalties which need to be paid to a company from Luxembourg are subject to a 5% tax rate. More aspects related to the provisions of the double tax treaty signed by Luxembourg and the UK can be detailed by one of our company formation representatives in Luxembourg.

 

Luxembourg and the United States of America have agreed upon and signed a double taxation treaty for taxes on income and property. This convention entered into force in January 1964 and it is useful for the prevention of double taxation of individuals doing business and earning income in the two countries as well as for the protection against fiscal evasion.

Luxembourg – USA double tax treaty

The treaty for the avoidance of double taxation on income is an effort not only to eliminate the unnecessary payment of the same type of taxes, but also an agreement that encourages international trade and investment in Luxembourg and establishes a series of procedures for the mutual assistance of the tax authorities of the two countries

 

 

Luxembourg is an appealing business hub that offers great conditions in terms of taxation to international investors. For instance, companies with less than EUR 175,000 taxable income, the corporate income tax of 15% will apply. For companies with taxable incomes between EUR 175,000 and 200,000 must pay EU 26,250 and 31% of the tax base above EUR 175,000. The solidary surtax of a 7% rate is applicable to enterprises registering taxable incomes of EUR 30,000. The municipal income tax of 6.75% is applicable in Luxembourg City, but it varies in each municipality. When it comes to VAT, this one of the lowest among the European countries and it is established at a 17% rate for most taxable goods and services. A reduced VAT tax of 14% rate applies to mineral oils, printed advertising materials, credit administration and more. As for the 8% VAT rate, this is applicable to textiles, art and antiques, leather products, electricity, utilities and many more. The VAT rate of 3% applies to foodstuff, special medical equipment, bars, phone services, etc.

 

 

Those interested in more details about the double tax treaties signed by Luxembourg with countries worldwide should address their inquiries to our team. If you are a foreign investor from one of these countries or if you simply want to know more about taxes in Luxembourg and other issues concerning investments you can contact our company registration agents in Luxembourg.