Double Tax Treaty Luxembourg – Belgium

Belgian natural persons and legal entities performing any type of taxable activities in Luxembourg are liable to taxation in accordance with the provisions of the double tax treaty (DTT) signed by the representatives of Belgium and Luxembourg. Persons who have set up a company in Luxembourg are taxed in this country in accordance with the stipulations of the treaty, on which our team of company formation agents can provide an in-depth presentation. 

 

 

The taxes which are the subject of the Luxembourg- Belgium double tax agreement are stipulated under the Article 2. 

 

According to Article 2.3.(1), Belgium will impose the following taxes: 

 

• individual income tax;

• company tax;

• income tax on legal entities;

• income tax on non-residents. 

 

Belgian businessmen who are interested in company formation in Luxembourg should know that their company will be liable to a set of taxes prescribed under the Article 2.3.(2), which also take into consideration the taxation of natural persons. 

 

Luxembourg applies the following taxation scheme: 

 

• individual income tax;

• company tax;

• the special tax on director’s fees;

• capital tax;

• municipal trade tax;

• municipal payroll tax;

• land tax. 

 

Our team of company formation specialists in Luxembourg can assist with more details on the manner in which such taxes must be paid by non-residents operating in this country. 

 

At the same time, investors can receive advice on the employment legislation applicable here and the level of taxation available for the employees of a company. 

 

It is important to know that Luxembourg and Belgium signed an amicable agreement in March 2015 referring to the employment taxation specified under the double taxation treaty. 

 

The treaty stipulates that the taxation regarding employees is concluded in the country where the employment activity is taking place. However, it is necessary to know that the taxation can be decided in accordance with the regulations of the state in which the employee is a tax resident, but the rule is applicable only in certain conditions. For example, it can be imposed if a Belgian employee is working in Luxembourg for less than 183 days in a period of one year. 

 

We invite those interested in other taxation aspects of the treaty to contact our team of company formation consultants in Luxembourg.