20 double tax treaties adopted by parliament
The Law enshrines the principle of the exchange of information on demand between tax authorities. Hence it is possible to proceed to an exchange of information in named, specific cases. The text of the law stipulates that the State that made the request must have exhausted all the usual methods for obtaining information foreseen by domestic procedure before presenting a request for information to another State.
In the same way, the State that requests information must provide evidence showing that the information required cannot be obtained by any method other than the exchange of information as foreseen by the treaty.
The treaty foresees, among other things, that in the case of tax fraud, the country to which the money was diverted must communicate the personal data of a suspect banking client with a period of one month. If the information requested is not produced within this delay, a tax administration fine of a maximum of 250,000 euros can be inflicted on the establishment withholding the information.
As at today the Grand Duchy of Luxembourg has 20 double tax treaties that provide for the exchange of information as foreseen in the OECD model treaty, and thus figures on the list of OECD jurisdictions that apply all the international standards in the matter of cross border tax cooperation.
It is worth recalling that Luxembourg decided, a year ago, to adopt in full the standard defined by the OECD model tax treaty concerning the exchange of information on demand between tax authorities in the area of income and wealth.