Guernsey has signed a double taxation arrangement (DTA) with Luxembourg.

It becomes the eighth DTA signed by the Channel isle and follows hot on the heels of similar agreements with the Isle of Man, Jersey, Qatar and Singapore as well as Hong Kong earlier this year.

Gavin St Pier, Guernsey's treasury and resources minister, signed the bilateral DTA with Luxembourg in London on May 10 with the Grand Duchy's chargé d'affaires to the UK, Beatrice Kirsch.

'This is an important further component in Guernsey's network of tax agreements. Following on so closely from the signing of our DTA with Hong Kong, it is further demonstration of Guernsey meeting the highest global standards of international tax co-operation,' St Pier.

Fiona Le Poidevin, chief executive of Guernsey Finance - the promotional agency for the Island's finance industry - said: 'There is already a strong link between Guernsey and Luxembourg in relation to financial services business and this is particularly the case with investment funds, where many platforms will have structures in both jurisdictions.

'The DTA means that individuals or companies with "home" as one jurisdiction but with interests in the other jurisdiction will have mechanisms in place to prevent them from being taxed by both sets of authorities on the same income. This clarity and certainty on matters of taxation will make it even more attractive to conduct business between the two jurisdictions.'

In addition to agreements with major international finance centres such as Luxembourg, Guernsey says it is continuing to conclude tax information exchange agreements (TIEAs) with developing economies in order to assist them in protecting their tax revenues.

While in London, the treasury and resources minister signed a TIEA with Botswana while a further TIEA, with Swaziland, is expected to be concluded in the near future. Together, the TIEAs with Botswana and Swaziland will take the number signed by Guernsey to a total of 43.

'Guernsey's tax team has built strong relationships with Southern African Development Community countries, including Botswana and Swaziland, over the past couple of years. The OECD's Global Forum has emphasised the importance of working with developing countries to share expertise on tax information exchange, thereby helping them to protect their tax revenues,' St Pier added.