Yuriko Backes, Luxembourg's Minister of Finance; Credit: MFIN

Luxembourg's Ministry of Finance announced on Thursday that the Grand Duchy and Cape Verde have signed their first double taxation agreement.

On Thursday 13 January 2022, Luxembourg's newly appointed Minister of Finance, Yuriko Backes, signed an agreement to avoid double taxation and prevent tax evasion in matters of income and wealth taxes between the Grand Duchy and Cape Verde.

The objective of this agreement is to promote economic relations between the two countries by eliminating double taxation. It also plans to include the latest standards for the exchange of information as well as the standards resulting from the base erosion and profit shifting (BEPS) action plan of the Organisation for Economic Co-operation and Development (OECD), thus taking into account the commitments made by Luxembourg at the international level.

Due to the COVID-19 pandemic, Minister Backes signed the agreement during a videoconference with Rui Alberto de Figueiredo Soares, Minister of Foreign Affairs, Cooperation and Regional Integration of Cape Verde.

Cooperation relations between Luxembourg and Cape Verde were institutionalised in 1993. Since then, the Grand Duchy has been one of Cape Verde's main development partners, according to the Ministry of Finance. Moreover, the Cape Verdean community in Luxembourg continues to grow: with 2,572 people in 2020, it is the largest African community in the Grand Duchy.

Minister Backes commented: "This new tax treaty continues to develop our diverse and strong relationships by facilitating two-way investment".