Net wealth tax (NWT) is an annual tax levied on the net assets of Luxembourg companies. Its distinctive feature is that it is due regardless of profit: a loss-making company, or even a wholly inactive one, may be liable to it. Often modest compared with profit tax, it nonetheless remains an item to anticipate, particularly for holding companies. The reform that came into force in 2025 also simplified its minimum scale, which makes a review worthwhile.
I. A tax on assets, not on profit
Net wealth tax is levied on the net tax value of the company’s assets as assessed on 1 January of each year. The taxable base brings together the assets (fixed assets, participations, receivables, cash, real estate) less the debts directly connected to them, all valued under specific tax rules — neither pure market value nor mere book value. Because it applies to assets rather than to profit, this tax is due even in the absence of any result.
II. Which companies are concerned
Liability depends on the tax transparency of the company. So-called opaque companies, endowed with their own tax personality, are taxed on their assets; transparent companies are not, their assets being taxed, where applicable, at the level of the partners.
| Liable (opaque companies) | Not liable |
|---|---|
| SARL and SARL-S, SA, SCA, SE | Transparent companies: SNC, SCS, SCSp |
| Branches of foreign companies (assets connected to the Luxembourg establishment) | Sole proprietorships and the liberal professions |
| SOPARFI (see below) | SPF and investment funds (SICAV, FCP, SEPCAV, ASSEP) |
The case of SOPARFI deserves a clarification: they are indeed subject to net wealth tax, but their qualifying participations may be excluded from the taxable base under the participation exemption regime. In practice, a passive holding company then most often bears only the minimum tax described below.
III. The calculation: the general scale
Where the taxable base is positive, net wealth tax is computed by applying a progressive two-band scale.
| Band of taxable net wealth | Rate |
|---|---|
| Up to EUR 500 million | 0.5% |
| Portion above EUR 500 million | 0.05% |
Thus, a company whose taxable net wealth amounts to EUR 8,000,000 pays a tax of EUR 40,000 (i.e. EUR 8,000,000 × 0.5%). This standard amount is nonetheless compared with a minimum tax, the company always paying the higher of the two.
IV. The minimum tax and the 2025 reform
Every company is liable to a minimum net wealth tax, whatever its level of activity. Until 2024, for predominantly financial companies (holding companies in particular), this minimum was based on a balance-sheet composition test: where at least 90% of the assets were financial in nature, a specific minimum applied, regardless of the size of the balance sheet. The 2025 reform abolished this 90% test. From now on, only the balance-sheet total determines the applicable minimum, according to the following scale.
| Balance-sheet total | Minimum tax |
|---|---|
| Up to EUR 350,000 | EUR 535 |
| From EUR 350,001 to EUR 2,000,000 | EUR 1,605 |
| Above EUR 2,000,000 | EUR 4,815 |
An example illustrates how the two calculations interact. A company with a balance sheet of EUR 1,500,000 and taxable net wealth producing a computed tax of EUR 1,000 falls within a minimum of EUR 1,605. It will therefore pay EUR 1,605, the minimum being higher than the standard tax. Beyond the simplification, this reform lightens and clarifies the burden on SOPARFI and holding companies.
V. Reducing net wealth tax through a special reserve
Profitable companies have a legitimate optimisation lever: the creation of an unavailable special reserve. In exchange for its commitment, the company obtains a reduction in net wealth tax. The mechanism follows strict rules that must be observed to the letter, failing which the benefit is recaptured.
- the reduction is capped at the amount of corporate income tax due in respect of the previous year;
- the reserve to be created must equal five times the reduction requested;
- it must be maintained and locked for five years;
- any distribution before that term triggers the recapture of the benefit obtained.
VI. Practical points to watch
- the value used is the one determined at 1 January of the tax year;
- the minimum tax applies even to inactive or loss-making companies;
- qualifying participations may be excluded from the base, under conditions;
- the special reserve must be secured rigorously (CIT cap and five-year lock);
- the return is filed electronically through MyGuichet.lu.
Conclusion
Net wealth tax is rarely the heaviest tax, but it is one that does not forgive inattention: it applies even to companies with no result, follows particular valuation rules and now rests on a minimum linked solely to the balance-sheet total. Well managed, it can even be reduced. At Ease Advisory, we determine your taxable base, apply the appropriate scale and minimum, secure the special reserve where relevant and take care of your return. A question about your situation? Let’s talk.