Supplies of goods and services, which are deemed to take place in Luxembourg, are subject to VAT at the standard rate of 17% (lowest standard VAT rate in the European Union) or, on certain transactions, at 14% (e.g. However, expenses linked to a shareholding qualifying for the participation exemption, including write-downs in the value of the shareholding booked as a consequence of a dividend distribution, are not deductible, up to the amount of the exempt dividend.In the event of disposal of a shareholding financed by debt, recapture rules may apply. Visit our Error! 2019) has to be requested in the corporate tax returns of year N-1 (e.g.

A solidarity tax of a maximum of 9% of tax must also be applied.Compulsory social security contributions for employees are listed below:The social security contributions have to be withheld by the employer from the employee's gross salary.Certain multilateral and bilateral social security agreements protect the interests of temporarily resident employees. Your message was not sent. 0000001182 00000 n

1. PwC Managed services. Fines and penalties suffered by the taxpayer are not considered as operating expenses and are therefore not tax deductible. Our Corporate tax pocket guide is designed to inform you on the main company taxes in respect of the Luxembourg tax legislation. Net wealth tax (NWT) NWT regime. The CIT rate is 17% for companies with taxable income in excess of EUR 200,001 leading to an overall tax rate of 24.94% in Luxembourg City for FY 2019 and FY 2020 (taking into account the solidarity surtax of 7% on the CIT rate, and including the 6.75% municipal business tax rate applicable).The CIT does not apply to tax-transparent entities (e.g. 0000000953 00000 n existing Luxembourg net wealth tax regime and include a decreasing scale for this tax, would re-cast the Luxembourg IP regime, and would make other changes to the country’s corporate and individual tax rules. Other VAT-exempt transactions, such as exports and related transports, allow the supplier to recover input VAT on related costs.Luxembourg resident taxable persons are, in principle, required to be registered for VAT.

Excise duty becomes chargeable at the time, and in the EU member state, of release for consumption. 0000001382 00000 n By continuing to browse this site you agree to the use of cookies. Furthermore, aggravated tax fraud (Based on a European Regulation, goods entering within the territory of the European Union may be subject to customs duties/import tariffs. There is no stamp duty in Luxembourg. food [except most alcohol beverages]; pharmaceutical products; books [including e-books since the Circular n°793 released by the Luxembourg VAT authorities of 17 May 2019]; radio and television broadcasting services [except adult entertainment]; shoes, accessories, and clothes designed for children under the age of 14).Banking, financial, insurance, and reinsurance transactions are generally exempt activities.

Any new pages will be created in draft mode, please navigate to those pages, fill out and publish normally. The regime provides an 80% exemption on qualifying income derived from the commercialization of certain IP rights, as well as a 100% exemption from net worth tax.

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Any new pages will be created in draft mode, please navigate to those pages, fill out and publish normally. • Bill n. 6891 amending, among others, the net wealth tax (NWT) regime and introducing certain measures for individuals.

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Please see If this comparison indicates a profit, corresponding income tax may be due unless the sales price is reinvested in eligible assets.

CIT, solidarity surtax, and municipal business tax) for Luxembourg City is 24.94% for FY 2019 and FY 2020.Taxation of international assignees working in LuxembourgNavigate the tax, legal, and economic measures in response to COVID-19© 2017 - 2020 PwC. A 7% solidarity surtax is imposed on the CIT amount. Forthcoming regulations expected later this year should clarify this point. Tax Insights from International Tax Services www.pwc.com Luxembourg initiates draft law for ATAD 2 implementation August 16, 2019 In brief The Luxembourg government, on August 8, tabled a Bill (no7466) before the Luxembourg Parliament setting out the draft legislation (the ‘Draft Law’) that will implement the EU anti-tax avoidance directive The Luxembourg tax treatment will follow the applicable accounting treatment.Formation expenses can either be directly charged to the profit and loss account of the year in which they are incurred or depreciated on a straight-line basis over a five-year maximum period. Join our event dedicated to the AWM Community! This measure might also allow taxpayers to use investment and other tax credits during a tax year, whereas the company might otherwise have been unable to do this because it was in a tax loss position.Goodwill is generally amortised over its useful life.

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