Ireland Luxembourg Double Taxation Agreement

In June 2009, Luxembourg signed a new tax cooperation agreement with France, which will allow the exchange of tax information, which is 50 years old. In accordance with paragraph 1 of the Protocol, the competent authorities of States Parties shall exchange information “foreseeable for the application of the provisions of this Convention or for the administration or application of national tax legislation of any kind and nature collected on behalf of States Parties or their political subdivisions or local authorities; to the extent that the taxation provided for in this Agreement is not contrary to the Agreement. On 22 May 2009, the governments of Luxembourg and Liechtenstein announced their intention to enter into negotiations for the conclusion of an OECD Model Convention for the Avoidance of Double Taxation. The agreement was signed in the same year. A declaration by the Luxembourg Ministry of Finance states that the Protocol, which amends the existing double taxation convention of 8 May 1968, provides for the exchange of information on request between the tax administrations of the two countries. It applies to the 2010 and subsequent tax years and has no retroactive effect. The agreement does not cover the automatic exchange of bank details and does not allow general requests or “fishing expeditions”. Luxembourg concluded a new tax treaty with the Netherlands on 29 May 2009. The agreement provides for the exchange of information between the two countries in tax matters, in accordance with OECD standards. Overall, tax treaties provide that companies are taxable in the country where they reside (the agreements contain “Tie Breaker” clauses to resolve cases where both countries assert their residence), except that if an entity established in one country has a permanent establishment in the other, the income of that permanent representation is taxed in the second country. Individual taxation also follows residence, but in cases where income could be taxed twice, there is either a “tie-breaker” clause or a provision that would charge tax paid in one country to tax on the same income due in the other country, while the agreement with the United States contains clauses on “savings” and “limitation of benefits”, which, in certain circumstances, may annul the subject matter of the agreement. At a meeting in Berlin in November 2009, German Finance Minister Wolfgang Schäuble and his Luxembourg counterpart Luc Frieden agreed to incorporate the Organisation for Economic Co-operation and Development (OECD) standard for the exchange of tax information into their bilateral double taxation (DBA) convention.

The agreement contains provisions for the exchange of tax information between the tax authorities of the two countries, in accordance with OECD standards. . . .