United States – Protocol Is Approved Amending U.S.-Luxembourg Tax Treaty

United States – Protocol Is Approved Amending U.S.-Luxe

This report covers the changes to the U.S.-Luxembourg tax treaty once the Protocol to that treaty – just approved by the Senate – takes effect.


On July 17, 2019, the U.S. Senate ratified the Protocol amending the U.S.-Luxembourg income tax treaty.1 The Protocol replaces the Exchange of Information article in the existing treaty with a new article that follows the approach of the U.S. model income tax treaty and the Organization for Economic Cooperation and Development (OECD) Model Tax Convention on Income and Capital.


The ratification of this Protocol, together with the protocols between the United States and Spain, Japan, and Switzerland, represents a breaking of the logjam that has prevented new treaties and protocols coming into effect since 2009.2

The revisions to the exchange of information article provide an additional impetus for international assignees to be compliant with the Foreign Account Tax Compliance Act (FATCA) and Foreign Bank and Financial Accounts (FBAR) filing requirements, as the Protocol expands the scope of information that can be exchanged between the United States and Luxembourg. 


The Protocol, accompanied by an exchange of notes between the two countries, was originally signed in 2009 and was transmitted to the U.S. Senate for its advice and consent as to ratification in 2010. It was approved by the Senate Foreign Relations Committee in 2011, but approval by the full Senate was blocked until this year. The existing treaty was signed in 1996 and entered into force on 20 December 2000.

The New Exchange of Information Article

The new exchange of information article introduced by the Protocol is modeled on the corresponding provisions in the U.S. and OECD model income tax treaties and provides for “more robust exchange of information between tax authorities in the two countries to facilitate the administration of each country’s tax laws.”3 The Protocol introduces a provision whereby a country may not decline to provide information solely because that information is held by financial institutions, nominees, or persons acting in a nominee or fiduciary capacity. Thus, a country is prevented from claiming that its domestic bank secrecy laws or similar legislation override its obligation to provide information under this treaty provision. This provision also requires disclosure of information concerning the beneficial ownership of interests in entities and assets such as bearer shares.4

Effective Date

The Protocol will enter into force once both the United States and Luxembourg have notified each other that their respective procedures for ratification have been completed. It will become effective for requests for information made on or after the date of entry into force with regard to tax years beginning on or after January 1, 2009.


1  “Protocol Amending the Convention between the United States of America and the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and its Protocol.” For the text of the Protocol, see https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/LuxembourgProtocol09.pdf.  For the vote on this and other Protocols, see the U.S. Senate web page “Roll Call Votes 116th Congress - 1st Session (2019)” at: https://www.senate.gov/legislative/LIS/roll_call_lists/vote_menu_116_1.htm .

For the Joint Committee on Taxation’s “Explanation Of Proposed Protocol To The Income Tax Treaty Between The United States And Luxembourg,” see: https://www.jct.gov/publications.html?func=startdown&id=3790 .

2  For prior coverage, see GMS Flash Alert 2019-107 (June 26, 2019).

3  See the Letter of Submittal of the Protocol, supra at page V.

4  Article 1 of the Protocol, amending paragraph 5 of article 28 of the treaty.

The above information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.


The information contained in this newsletter was submitted by the KPMG International member firm in United States.

© 2024 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance.

GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today