Representatives of Senegal and Luxembourg in February 2016 signed an income and capital tax treaty that incorporates certain of the recommendations under the base erosion and profit shifting (BEPS) project of the OECD.
The tax treaty (French) (PDF 2.97 MB) signed by Senegal and Luxembourg includes: (1) language clarifying that it is not intended to create opportunities for double non-taxation: (2) a general anti-abuse provision (“principal purpose test”); (3) specific anti-abuse provisions with respect to treaty benefits relating to dividends, interest, royalties, and other income; and (4) the possibility for the countries to apply their domestic anti-abuse provisions (to the extent that this application does not result in a tax treatment that is contrary to the tax treaty’s provisions).
The tax treaty will enter into force following completion of the applicable ratification procedures in each signatory country.
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