Article 11 Interest
     1. Interest arising in one of the States and paid to a resident of the other State shall be taxable only in that other State.
     2. The competent authorities of the States shall by mutual agreement settle the manner in which the State wherein the interest arises shall forgo its taxation.
     3. The term "interest" as used in this Article means income from government securities, bonds and debentures , whether or not secured by mortgage, and from debt claims of all kinds as well as all other income deemed to be from money lent under the tax laws of the State from which the income is derived. However, the term does not include income from debt claims including a clause for participation in profits as described in paragraph 5 of Article 10.
     4. The provisions of paragraph 1 shall not apply if the recipient of the interest, being a resident of one of the States, has in the other State in which the interest arises a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of article 7 shall apply.
     5. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each State, due regard being had to the other provisions of this Convention.
 
The above information is the wording of the article dealing with the withholding tax on interest of the tax treaty between The Netherlands and Luxembourg. Please note that the ultimate withholding tax rate may differ from the treaty rate, for instance as consequence of domestic anti-abuse legislation, provisions of the treaty protocol, etc. Before you use this information we therefore strongly recommend that you consult us to determine the accurate withholding tax rate for your specific situation. If you require our follow up, you can contact us info@taxci.nl or call us at our offices: Ph. + 31 (10) 2010470.