In early April of this year, despite having responded favourably to the G-20 group's request to cooperate in combating cross-border tax evasion, Luxembourg was placed by the OECD on a "grey list" of jurisdictions that had agreed to implement tax cooperation standards but had not yet done so.
In order to have its name removed from that list, Luxembourg committed to easing its banking secrecy rules through the renegotiation of the provisions on the exchange of information in at least 12 of its double tax treaties.
The first step was taken on 20 May 2009 in relation to the United States of America, when Luxembourg signed a protocol amending the 1996 double tax treaty between the two countries. Subsequently, it signed protocols amending existing treaties with France, the Netherlands, Denmark, Finland, the United Kingdom, Austria and Norway and concluded new treaties with Qatar, Bahrain, India and Armenia.
All of the above protocols and new treaties contain information exchange provisions that fulfil OECD requirements, by, among other things, allowing the exchange of information, including bank information, on individual taxpayers upon request in all tax matters. However, the provisions do not allow the automatic sharing of bank information.
According to an announcement by the Luxembourg government dated 8 July 2009, the country has been removed from the OECD "grey list". This announcement was confirmed by the OECD later that same day. Consequently, Luxembourg now ranks as a jurisdiction that has "substantially implemented the internationally agreed tax standard".
Within a period of three months, Luxembourg has achieved the commitment it made earlier this year to have 12 tax treaties in line with the relevant OECD standards. According to the Luxembourg government, 15 agreements will have been signed by the end of 2009, including agreements with Belgium and Germany in the coming weeks. This shows that Luxembourg aims to go further than honouring the above commitment and clearly intends to continue the process of negotiating agreements which meet OECD standards.