The principal corporate taxes to consider in Luxembourg are the following :
- Income tax (includes the municipal business tax)
- Withholding taxes upon distribution
- Net wealth tax
- Value added tax
Income tax
The marginal income tax rate for companies is 28.80 % (includes the municipal business tax).
Dividends received from, and capital gains realised upon the sale of qualifying participations are exempt from tax if certain criteria are met.
For intellectual property, an exemption is granted for 80 % of the net profit derived from patents, trademarks, designs, models and copyrights.
Withholding tax
- Dividends : basic rate 15 % which can be reduced through double tax treaties or the participation regime
- Interest : 0 %
- Royalties : 0 %
- Director fees : 20 %
Net wealth tax
- Flat rate of 0.5 % on the net assets, excluding qualifying participations and related debt.
Value added tax
- The standard rate is 15 %.
Double tax treaties
Taxable Luxembourg companies benefit from an extensive network of double tax treaties.