Double Taxation Treaty between Luxembourg and Saudi Arabia signed
From today, Luxembourg can add a new Double Taxation Treaty (DTT) to its list, bringing it to a total of 65. On the occasion of the Euromoney Conference taking place in Riyadh, Saudi Arabia, Luc Frieden, Luxembourg Minister of Finance, signed a DDT with the Saudi Minister of Finance Dr Ibrahim Al-Assaf.
The treaty will encourage both the Saudi and Luxembourg business communities to strengthen business relations between Luxembourg and the Kingdom of Saudi Arabia. Minister Frieden promised to assure government support in order to foster friendship between the two countries.
The DTT was signed on the occasion of a LFF mission to Dubai, where the Minister, together with a Luxembourg delegation, presented on the advantages of the Luxembourg financial centre. This time, the seminar focused on Luxembourg real estate and wealth management solutions for international investors.
In Riyadh, the Minister also commented on the on-going discussion about the stability of the Eurozone. He said that there is no alternative to sound public finances and financial discipline in order to generate growth. “We have to come back to fiscal discipline. There is no way around structuring reforms” Minister Frieden assured. Saying that no country can avoid this difficult path, he called on the French government to reduce its deficit.
The Eurozone stability is still an issue for the Arab world, though the discussion has shifted. “One year ago, it wasn’t even clear if the euro would survive”, the Minister said. “Our main issue now is the long-term stability of the Eurozone. When it comes to solidarity and solidity amongst Eurozone members, we have achieved a lot in the short-term. Now we’ll have to show that our measures can generate growth”.
With 500 million people, the Eurozone is an important market not only for the Middle East, but for the whole world. The Minister said that he is aware that the reforms to save the euro were not very popular amongst the residents of the countries concerned and that people, understandingly enough, tend to forget the positive outcomes. Nevertheless, the Euro has its advantages such as no inflation, price transparency amongst Eurozone members and regulated competitiveness.
However, the Minister believes in a certain need for competition and insists on a competitive global framework. “Of course we support the fight against tax fraud, that’s why agreed to the automatic exchange of information”. The Minister also said that he insists on a level playing field and thus urges the UK and the US to join the efforts.
Regarding the current discussion in the international media, the Minister underlined that there are two different issues, namely individual and corporate taxation. Minister Frieden wants to initiate a discussion on the taxation of multinationals in the EU, since this is not only affecting Luxembourg-based companies but also those domiciled in other EU-countries.
“Multinationals have to pay taxes, but they must be free to choose the country for their headquarters. We need to make sure that cross-border activities remain normal in an economy”. The Minister once again stressed that the number of multinational headquarters in a country has nothing to do with the size of a country: “Globalisation is an asset; everybody wants to have their fair share”. EA
(photo copyright© Ahmed Fathi Ahmed)