An agreement signed by Taiwan and Luxembourg on avoiding double taxation and preventing tax evasion was approved by the European country’s parliament on Wednesday and is to take effect on the first day of next year, the Ministry of Foreign Affairs (MOFA) said.
The agreement was signed by the Ministry of Finance’s Taxation Agency and Luxembourg’s Direct Tax Administration on Dec. 19, 2011 and is to go into force on Jan. 1 next year, the foreign affairs ministry said in a statement.
According to the Benelux country’s regulations, after being approved by the parliament, the pact will now be submitted to Grand Duke of Luxembourg Henri to obtain his signature before it is promulgated, the statement said, adding that all domestic legal procedures related to the deal have been completed.
This is the 27th comprehensive agreement regarding double taxation avoidance concluded that nation has signed with its trading partners and the 12th such treaty it has signed with a European power.
The pact with Luxembourg is expected to create an environment that ensures tax fairness in the two signatory countries, making them more friendly to bilateral investment.
It is also expected to help expand bilateral trade contacts and technical exchanges, strengthen taxation cooperation and create jobs, the foreign affairs ministry said, calling it an important landmark in the development of substantive relations between the two countries.
The foreign affairs ministry said it will stick to the principle of “flexible diplomacy” in advancing the nation’s economic and trade development, while continuing to create an environment favorable for local business to develop and for foreign enterprises to invest in Taiwan.
According to the Bureau of Foreign Trade, trade between Taiwan and Luxembourg totaled US$33.98 million last year.