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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Luxembourg: Royalties

Article 12 of the Convention allows for source state taxation of royalties (see DT12311) However, the EC Directive on Interest and Royalties (2003/49EC) (see INTM400000) provides for the abolition of source state taxation on interest and royalty payments made between associated companies in different Member States. It also ensures that the payments are subject to tax once in a Member State. It applies in the United Kingdom with effect from 1 January 2004.