Taxation in home country
Luxembourg has double tax treaties with many other countries in order to avoid the possibility of double taxation on an individual’s income. Double taxation can occur when, for instance, you are obliged by domestic law to pay income tax on a rentable property in your home country and you have to pay tax on worldwide income in the country you are resident in.
Double tax treaties are drawn up individually between the two countries, and will subsequently vary according to the agreements made.
We strongly advise you to contact your local embassy or speak to a tax consultant before signing your contract, so you are aware of all tax implications.
In principle the two types of double tax agreements are either, that all tax is paid in the country of residence and is therefore exempt in the country it arises from, or the country where the income arises deducts the tax at source (withholding tax) and the taxpayer receives a ‘foreign tax credit’ in their country of residence.
At present Luxembourg has double tax treaties with the following countries:
Austria, Belgium, Brazil, Bulgaria, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Korea, Malta, Mauritius, Morocco, the Netherlands, Norway, Poland, Romania, Russian Federation, Singapore, Spain, Sweden, Switzerland, UK, USA, Vietnam.