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Taxation in Luxembourg

Unfortunately, Luxembourg is subject to high taxed. Luxembourg tax liability applies to Luxembourg residents on their worldwide income. An individual qualifies as a resident if they have a tax domicile or residency in Luxembourg.

Income Tax

Taxation in Luxembourg (in Euros):

0 - 11,265 0%
11,265 - 13,171 8.20%
13,171 - 15,077 marginal increase of 2.05% per slice of EUR 1,906
Above 39,885 38.95%

Corporate tax

Companies are subject to the Communities Income Tax (IRC). In addition, a surcharge of 4% is payable to the unemployment fund. A municipal business tax is also levied at an average rate of 7.5%. A municipal commercial tax (ICC) also applies to commercial, industrial, mining, and craft entities established in Luxembourg at a rate of 3%.

VAT

The maximum VAT rate is 15% which is the lowest in the European Union. Some financial, health and medical services are exempted of VAT. The reduced rate is 6% - 12% and the super reduced rate is 3%

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