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Luxembourg UAE Double Taxation TreatyOn April 29, 2009 the Luxembourg parliment finally ratified the double taxation tax treaty between Luxembourg and the UAE, The traety was pending since November 2005. The treaty includes provisions regarding tax withholding rates for payments of dividends, interest and royalties, based mainly on the OECD model, taxation of capital gains between the two countries and exchange of tax information. The treaty will be effective from 1.1.2010. Luxembourg Corporate Tax ReductionLuxembourg's prime minister announced on 22 May 2008 that he will reduce Luxemburg's corporate tax rate from 29.63%, consisting of corporate tax and municipal tax, to 25.5%. The reduction will be effective from 1.1.2009. From 1.1.2009 the 0.5% capital duty will be abolished. Capital duty is imposed on contributions of capital to a company. Earlier in 2008 the capital duty was reduced from 1% to 0.5%. The proposed changes are expected to increase Luxembourg's attractiveness to foreign investors. |
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