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Luxembourg

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Tax authorities

Administration des Contributions Directes
45, Boulevard Roosevelt, L-2982, Luxembourg
Tel: +352 40 800-1
Fax: +352 40 800-2022
Website: www.impotsdirects.public.lu

Tax rates at a glance

(As of September 2014)

Corporate tax rate 21 (a)
Effective 29.22 (b)
Capital gains 21
Branch tax 21 (c)
 
Withholding tax
Dividends 0/15 (d)
Interest 0 (e)
 
Net operating losses (years)
Carryback 1
Carryforward Unlimited
  1. The 21% rate applies to companies whose taxable income exceeds €15,000 ($19,000); otherwise, the rate is 20%. The corporate income tax is increased by a contribution of 7% to the employment fund. A municipal business tax also may be imposed at rates ranging from 6% to 12%, depending on where the undertaking is located. In addition, Luxembourg collective entities that own qualifying holding and financing assets exceeding 90% of their total balance sheet are subject to a minimum income tax of €3,000 ($3,900). Other Luxembourg companies are subject to a progressive minimum income tax depending on the total assets on their balance sheet. The tax will range from €500 ($645) (for a total balance sheet up to €350,000 ($450,000)) to €20,000 ($26,000) (for a total balance sheet exceeding €20 million ($26 million)).
  2. Taking into account the employment fund contribution and the municipal tax, the aggregate effective rate for Luxembourg City is 29.22%.
  3. Branches are taxed at the same rates as domestic companies. There is no branch remittance tax.
  4. Dividends paid to a nonresident company generally are subject to a 15% withholding tax, unless the rate is reduced under an applicable tax treaty. No withholding tax is levied on dividends distributed by a Luxembourg company to a parent company located in a treaty country if conditions similar to those in the Luxembourg participation exemption regime are satisfied, that is, that the parent company (i) holds at least 10% of the payer company or a participation acquired for at least €1.2 million ($1.5 million); (ii) holds or commits to hold the shares for an uninterrupted period of at least one year; (iii) has a legal form similar to the one of the forms listed in the Luxembourg corporate income tax code; and (iv) is subject to a tax similar to the Luxembourg corporate income tax.
  5. Luxembourg does not levy withholding tax on interest. However, profit-sharing bonds and debt instruments with remuneration linked to issuer profits are taxed as dividends at a rate of 15%.

Luxembourg

Sebastien Labbe and Santiago Fernandez
Luxembourg
Luxembourg

Luxembourg will have increased VAT rates in 2015, while continuing its efforts to fight VAT fraud and is further strengthening its commitment to tax transparency and exchange of information. Sebastien Labbe and Santiago Fernandez of KPMG explain what other tax reforms are on the way.

[Show full article]

Leading firms

Luxembourg is at the beginning of a somewhat shaky economic recovery, like much of the Eurozone, and the tax market is likely to benefit from increased investment and structuring deals as growth continues."We have experienced our most profitable year ... [more]

Jean Schaffner leads Allen & Overy's Luxembourg tax practice and is a member of the global tax board. He advises various international investment banks on tax-structured finance schemes and has experience advising institutional investors and private ... [more]

Arendt & Medernach is one of the largest law firms in the jurisdiction and has a tax practice run by four partners – Eric Fort, Thierry Lesage, Alain Goebel and Bruno Gasparotto. A team of 21 other tax professionals support the partnership team. The ... [more]

Deloitte's tax practice is headed by Raymond Krawczykoski, who leads a practice of 28 partners and 409 further tax professionals. The firm added 14 professionals to its team this year, including three directors. Specialities of the team include financial ... [more]

Sebastien Labbe leads KPMG's tax practice in Luxembourg, which consists of 21 partners and 216 other tax professionals. These are divided across the specialities of business tax, financial services, indirect tax, international tax, real estate and infrastructure, ... [more]

Peter Adriaansen and Pieter Stalman lead Loyens & Loeff's tax department in Luxembourg. The law firm's local presence is made up of eight partners and 37 other fee earners. The firm saw significant staff turnover during the year as it sought to expand ... [more]

PwC

Wim Piot is PwC's tax leader in Luxembourg. The practice offers services in global tax compliance, tax consulting and accounting, compliance and reporting. The local firm is one of the leaders in the jurisdiction, employing around 660 professionals in ... [more]

Keith O'Donnell is the managing partner of Atoz, the Luxembourg member firm of Taxand, the global network of independent tax firms. Through the network Atoz can provide a worldwide tax service. The firm advises on tax planning and structuring as part ... [more]

André Pesch heads the tax practice of Baker & McKenzie in Luxembourg, which consists of two partners and seven other tax professionals. The team is well-established, with a large local client base. The youngest members of the team have at least five ... [more]

Bonn Steichen & Partners is headed by Alain Steichen, and has one other partner and senior counsel Christine Beernaerts. Two new associates joined the team to bring the number of other tax professionals to seven, up from five last year. The firm is well-respected ... [more]

EY

Marc Schmitz heads the tax practice of EY Luxembourg, which consists of 28 partners and has recently hired a banking partner to cater for a growing speciality for the firm. Further specialities are telecommunications, media, technology, life sciences, ... [more]

Bonn & Schmitt is a leading Luxembourgian law firm with an international tax focus. The client base of the firm stretches through Europe, Asia, the US, South America, and South Africa, and has been established via a strong international community of ... [more]

Clifford Chance's local tax practice is led by François-Xavier Dujardin, who has more than 15 years of experience as a tax specialist in Luxembourg and whose practice covers funds, structured finance and international tax structuring. This year the practice ... [more]

Elvinger, Hoss & Prussen has been an independent business law firm in the jurisdiction since 1964 and a pioneer in the construction of Luxembourg as a leading financial centre. The tax practice consists of 19 partners. All three founders work regularly ... [more]

Olivier Van Ermengem leads Linklaters's tax practice in Luxembourg, with the assistance of VAT partner Guido de Wit, who divides his time between Brussels and Luxembourg. The pair oversee a team of five tax professionals and have recently added an associate ... [more]

Jean-Marc Groelly and Christophe Joosen are joint heads of NautaDutilh's tax practice, which is consists of four other tax professionals. The firm advises on all aspects of Luxembourg and international tax law, particularly focusing on the tax aspects ... [more]

Stibbe has been involved in important deals in the jurisdiction and has three well-respected tax partners. Ayzo van Eysinga leads the team, which specialises in corporate tax and VAT and quadrupled in size in 2013-2014. Diogo Duarte de Oliveira, head ... [more]

Frédéric Feyten is managing partner of OPF Partners Luxembourg, an independent law firm, and heads the firm's tax practice. He has expertise in M&A, financial products, and structured finance, having specialised in international tax for around 18 years. ... [more]

See also

Luxembourg
Western Europe

Firm contact details