(a) On the top of which is levied a 4% surcharge on CIT due for the unemployment fund. Effective rate: 21.84%. Taking into account the MBT, the global corporate income taxation is 28.59% for the city of Luxembourg.
(b) Tax levied on behalf of municipalities where the business undertaking is located. Rates vary according to municipalities. 6.75% is the rate applicable for Luxembourg city.
(c) Capital gains are subject to CIT. Exemptions are available for capital gains on shares under the parent subsidiary regime under certain conditions.
(d) Due on the net assets of the company. An exemption is available for qualifying shareholdings.
(e) Abolished in 2009.
(f) Branches are subject to corporate income tax, MBT and NWT.
(g) Reduced under double tax treaties or exempt under the parent subsidiary regime under certain conditions.
(h) Except if in relation with certain profit participating instruments, or under the provisions of the Directive 2003/48/EC of June 3 2003 on the taxation of savings income (withholding tax of 20%) or under the Luxembourg provisions applicable to interest payments made to individuals resident in Luxembourg (withholding tax of 10% based on the Law of December 23 2005).
Source: Professionals from ATOZ, the Luxembourg member of Taxand, the global network of leading independent tax firms
In April 2009, Luxembourg was placed by the OECD on a "grey list" of
jurisdictions that had agreed to implement tax cooperation standards but
had not yet done so.
To have its name removed from that list, Luxembourg committed to
easing its banking ...
[more]
In April 2009, Luxembourg was placed by the OECD on a "grey list" of
jurisdictions that had agreed to implement tax cooperation standards but
had not yet done so.
To have its name removed from that list, Luxembourg committed to
easing its banking secrecy rules through the renegotiation of the
provisions on the exchange of information in at least 12 of its double
tax treaties. However, the provisions do not allow the automatic sharing
of bank information.
On January 1 capital duty with respect to contributions to the
capital of Luxembourg companies was abolished. This contribution duty
had been 0.5%. A withholding tax exemption of dividend distributions to
treaty jurisdictions was also introduced at the same time. This replaces
the withholding tax of 5% that had previously been levied. As part of
the 2009 tax package, the Luxembourg government has reduced its
corporate income tax rate by one percentage point.
The double tax treaty between Luxembourg and Hong Kong entered into
force on January 20. This treaty will create a favourable tax framework
for structuring investments between the two locations. As Luxembourg has
a very favourable holding regime and an extensive tax treaty network,
as well as being a member state of the EU, Chinese and Hong Kong
investors may be able to use this tax treaty as a platform for their
European investments.
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