• Luxembourg government announces its 2017 tax reform plans


    The Luxembourg government announced on 29 February 2016 its tax reform plans for 2017. These are of course proposed measures and have not yet been submitted to Parliament for discussion. As such, they might be subject to changes.

    What are the 2017 tax reform plans for corporations?

    Corporate income tax rate (IRC) reductions

    Currently, the IRC stands at 21% and the government is proposing a progressive reduction, from its current level to 19% in 2017 and to 18% in 2018. This will result in a global tax rate for companies in Luxembourg City of 27.08% in 2017 and 26.01% in 2018.

    For corporations with a taxable basis up to €25,000 the IRC is proposed to decrease from 20% to 15%. This would support start-ups and small businesses.

    Increase of minimum tax for Soparfis

    The minimum net wealth tax for holding companies will be increased to €4,815 from €3,210

    Tax losses limitations

    As of 2017, tax losses realised would be carried forward for a limited period (anticipated to be 10 years) and would only offset up to 80% of the taxable profits of each year.

    Abolishing registration duties

    The registration duties due on notarial deeds documenting the transfer of debt claims would be abolished.

    Family businesses

    Capital gains on real estate assets held by family businesses would be rolled over if transmitted to the next generation of the same family.

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