Moldova issued Decree No. 1653 on 20 November 2024, which was published in the Official Gazette on 26 November 2024, enacting the law to ratify the amending protocol to the 2007 income and capital tax treaty with Luxembourg.
Earlier, the protocol was signed 25 June 2024 in Luxembourg. It is expected to promote investment and strengthen bilateral cooperation between the two countries.
These changes come in the wake of the OECD’s endorsement of the BEPS (Base Erosion and Profit Shifting) Action Plan. The 15 actions outlined for member states to implement BEPS include minimum standards targeting harmful tax practices, treaty abuse, country-by-country reporting, and dispute resolution mechanisms. These measures address issues that arise when obligations are unmet or when actions by one country create negative spillover effects for others. A key section of BEPS focuses on preventing the abuse of double taxation agreements.
The ratification will come into effect once the necessary instruments are exchanged, and it will apply from 1 January of the year following its entry into force.
