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Luxembourg bends to EU demands, toughens tax rules

Luxembourg toughened its tax rules, impacting the Luxembourg-based funding arms of multinational companies, The Wall Street Journal reported Dec. 27.

The government's decision to toughen the rules comes amid European Commission pressure on countries to curb corporate tax dodging.

The new rules, effective Jan. 1, 2017, will override previous tax rulings, which have allowed companies to use transfer pricing to cut their tax bills by redistributing profits to regions where tax rates were the lowest.