• Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/21/2014

Luxembourg - Tax treaty with Taiwan enters into force 

August 21: An income tax treaty and Protocol between Luxembourg and Taiwan, with its recent entry into force, has an effective date of 1 January 2015.

The treaty is dated 19 December 2011, and following the exchange of ratification instruments on 12 July 2014, the tax agreements entered into force on 25 July 2014.

For corporate taxpayers, the treaty and Protocol provisions provide:

  • A collective investment vehicle will be considered as both a resident for treaty purposes and the beneficial owner of the income (especially dividends and/or interest) it receives if the collective investment vehicle is treated as a “body corporate for tax purposes” in its territory of residence—thus, a beneficial provision for Luxembourg’s investment fund industry and specifically for SICAVs / SICAFs / SV that may benefit from the reduced treaty rates.
  • The standard rate for the dividend withholding tax is 10%, but with different rates applying under specific circumstances.
  • Interest payments generally are subject to a 10% maximum withholding tax rate, but again with different rates applying under specific circumstances.
  • The standard withholding tax rate on royalties is 10%.

Read an August 2014 report [PDF 129 KB] prepared by the KPMG member firm in Luxembourg: Tax Agreement between Taiwan and Luxembourg

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