Belgium adds Luxembourg to its list of tax havens

Belgium has added neighboring Luxembourg to its list of tax havens, De Morgen reported on Tuesday.

Belgian companies must now report all transactions with Luxembourg exceeding 100,000 euros (110,316 U.S. dollars) to the tax authorities.

This follows a 2010 law that states all countries that appear for more than one year on the OECD's list of tax havens will also be recognized as such by Belgium.

Luxembourg has been on the OECD list since November 2013.

Finance Minister Johan Van Overtveldt is to send a letter soon to explain the new rules.

Tax expert Michel Maus said that this will have a big impact on Belgian companies, many of which operate within Luxembourg.

"It has never been the intention of the Belgian Law to catalogue a European country as a tax haven, but it does happen. That is in itself a punishment," Maus was quoted as saying by De Morgen.

"I fear that with this decision Belgium has created diplomatic misery with Luxembourg," he said.

"Just as the country becomes more transparent, Belgium puts it on a list of tax havens. But for the fight against tax fraud it is a step forward. The tax authorities will get a much better view of financial transactions with Luxembourg," he said. Endit