The Double Taxation Agreement (DTA) between Luxembourg and Brunei is expected to be entered into force on 26 January 2017. The treaty was signed on 14 July 2015. The agreement will be applicable from 1 January 2018 for both countries.
According to the treaty the maximum rate of withholding taxes on dividends, interest, and royalties will be 10%. However, if the beneficial owner of the dividends is a company (other than a partnership) and holds a direct holding of at least 10% of the share capital of the company paying the dividends for an uninterrupted period of at least one year, the treaty provides for a 0% rate.
Luxembourg applies the credit and exemption-with-progression methods for the avoidance of double taxation whereas Brunei applies the credit method for the avoidance of double taxation.