• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/26/2013

Luxembourg - Protocol amending treaty with Russia is ratified 

July 26: A Protocol amending the Luxembourg-Russia income tax treaty has been ratified and thus will be effective beginning 1 January 2014.

The Protocol was signed in 2011, and was ratified by Russia in late December 2012 and by Luxembourg on 4 July 2013.

Among the changes to the treaty contained in the Protocol are measures that:

  • Reduce the withholding tax rate on dividends (reduced from 10% to 5% in certain circumstances)
  • Revise the rules for taxation of income from immovable property
  • Provide “other income” is subject to taxation in its state of origin
  • Allow for an exchange of tax information
  • Introduce anti-treaty shopping rules under a limitation of benefits provision
  • Provide guidance on determining the tax residence of legal entities
  • Extend the definition of a permanent establishment (PE)

The Protocol reflects a general trend in international tax of enhanced tax transparency and reinforcement of substance of group companies.

Read a July 2013 report [PDF 124 KB] prepared by the KPMG member firm in Luxembourg: Luxembourg and Russia ratify treaty protocol

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