Treaty detail
United States - Luxembourg tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1996-04-03
Effective
2000-12-20
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 15% · Corporate rate: 5%
The 5 percent corporate rate generally depends on direct ownership of at least 10 percent of the voting stock. Beneficial-ownership and qualifying-resident conditions apply and require article-level review under the 2009 protocol framework.
Interest
Rate: 0%
The treaty generally provides zero-percent source-country interest withholding. Contingent interest and certain back-to-back arrangements remain subject to article-level review.
Royalties
Rate: 0%
The treaty generally eliminates source-country withholding on qualifying royalties across the major copyright, patent, and know-how categories.
Permanent establishment
Construction threshold: more than 12 months
Dependent-agent analysis remains important where a person habitually concludes contracts on behalf of the enterprise under the treaty wording.
Other treaty flags
The Luxembourg treaty generally allocates private pensions to the residence state. Government pensions and social-security payments follow distinct rules and deserve article-level review.
Seeded article summaries
Article 4
Residence
Defines treaty residence and gates access to reduced withholding and business-profit protection.
Residence under the Luxembourg treaty must be read alongside the limitation-on-benefits article, which was reinforced by the 2009 protocol updating the exchange-of-information framework. The combined analysis determines whether treaty benefits actually apply.
Article 5
Permanent Establishment
Sets the business-presence threshold for source-country taxation.
The Luxembourg treaty follows the standard rule under which a building site, construction or installation project, or drilling rig creates a permanent establishment only if it lasts more than twelve months. Preparatory-and-auxiliary carve-outs apply.
Article 7
Business Profits
Generally reserves business profits to the residence state absent a permanent establishment in the other state.
This is the operating-rule article for cross-border activity once the PE analysis is complete. It generally keeps business profits from being taxed in the source state where no PE exists.
Article 10
Dividends
Provides reduced source-country withholding rates for qualifying dividends.
The Luxembourg dividend article supports the standard 15 percent and 5 percent rates with conditions that include direct-ownership thresholds and beneficial-ownership status.
Article 11
Interest
Generally provides for zero-percent source-country interest withholding.
Interest under the Luxembourg treaty is generally not subject to source-country withholding. Contingent interest and certain related-party arrangements remain subject to article-level review.
Article 12
Royalties
Generally removes source-country withholding on qualifying royalties.
The royalty article is especially valuable for software, licensing, and IP structures because the treaty generally produces a zero percent result across the major royalty categories.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Luxembourg treaty documents pageVerified 2026-05-20
- Official U.S.-Luxembourg treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.