LUXEMBOURG announced a reduction in the corporate income tax rate from 29.63% to 25.5% and abolition of a capital duty. The changes are to take effect on January 1, 2009. The capital duty is currently 0.5%. It is like a toll on money flowing through Luxembourg companies to reinvest outside. It would apply, for example, where a US parent company makes a
capital contribution to a Luxembourg holding company that the holding company uses, in turn, to invest in a project in a third country. The moves are an effort to keep Luxembourg
competitive with Holland, Ireland and other jurisdictions that are making a play for offshore holding companies.