Luxembourg, UK Sign New Tax Treaty to Avoid Double Taxation, Tax Evasion

Luxembourg's Minister of Finance, Yuriko Backes, visited London from Thursday 7 to Friday 8 June 2022 as part of a financial mission.

Minister Backes was first received by John Glen, the Economic Secretary of the British Treasury and City Minister, for a bilateral meeting, which follows an initial exchange in Luxembourg in March of this year. The ministers discussed topical issues of common interest, and took stock of bilateral cooperation. Minister Backes underlined: “It was a pleasure to see John Glen again to discuss the development of our financial centres and the strengthening of our cooperation. In today's uncertain environment, a deep and ongoing dialogue with the UK is more important than ever. As one of the top three international financial centres, our Place and the City are closely linked. Well-developed and interconnected financial markets will remain essential to mobilise the capital needed to finance the green and digital transition.”

Minister Backes then signed with Lucy Frazer, Financial Secretary to the Treasury, a new tax treaty between Luxembourg and the United Kingdom aimed at avoiding double taxation and preventing tax evasion. This new convention, which will replace the old treaty of 1967, will greatly promote trade and investment between the two countries, and contains the latest standards in terms of tax transparency resulting from the work on the BEPS of the OECD. On this occasion, Ms Frazer said: “I have been delighted to be able to help strengthen the long-standing partnership that exists between the United Kingdom and Luxembourg by signing this new tax treaty. Through it, cross-border trade and investment between our two countries will continue to flourish in the future.”

Minister Backes also took advantage of her stay in London to meet the directors of several British financial establishments present in Luxembourg. She was also invited by the City of London Corporation to an exchange of views with City representatives on the future development of the British financial centre and its post-Brexit relations with the continent. These discussions will have made it possible to take stock of their strategic priorities in the European Union, particularly in the field of the digitalisation of financial services and sustainable finance.

During an interview with Nikhil Rathi, Director of the Financial Conduct Authority – the regulator of the British financial sector – Minister Backes took stock of the priorities for the regulation of the financial sector in the United Kingdom.

Finally, Minister Backes attended the official launch ceremony of the Business Club Luxembourg-United Kingdom. This new platform, jointly created by the Luxembourg Chamber of Commerce and the Luxembourg Embassy in London, will aim to link the business communities of the two countries and aims to create new fruitful Anglo-Luxembourgish partnerships.

Minister Backes commented: “The United Kingdom remains an important partner for Luxembourg and its economy and my meetings with the main British players, the signing of a new tax treaty, but also the launch of the Business Club Luxembourg-United Kingdom are concrete and significant steps towards further strengthening this long-standing partnership.”

From London, Minister Backes will travel to Paris, where she will take part in the meeting of the OECD Council at Ministerial level, which will be held this year under the theme "The future we want: better policies for next generation and a sustainable transition".