Tax & compliance

Luxembourg tax law is both attractive and demanding. At Ease Advisory, we take charge of all your tax obligations and ensure their compliance throughout the year. Our role is threefold:

• Securing your position;
• Avoiding any risk of penalty;
• Identifying, in strict compliance with the regulations, the legitimate optimisations specific to your business.

Your tax returns

We prepare and file all of your returns within the statutory deadlines:

• Corporate income tax (CIT)
• Municipal business tax (MBT)
• Net wealth tax (NWT)
• Periodic and recapitulative VAT returns
• Withholding tax returns, on salaries and wages as well as on investment income

Corporate tax rates since 2025

Since tax year 2025, corporate income tax (CIT) follows three brackets:

• 14% where taxable income does not exceed EUR 175,000;
• EUR 24,500 plus 30% of the portion exceeding EUR 175,000, between EUR 175,000 and EUR 200,000;
• 16% where taxable income exceeds EUR 200,000.

CIT is then increased by 7% for the employment fund.

Municipal business tax (MBT) is added on top, calculated in two steps:

• A tax base of 3% of the adjusted operating profit, after an allowance of EUR 17,500 for companies subject to CIT;
• That base multiplied by the municipal rate.

Unlike CIT, MBT is not deductible for corporate taxpayers. For a company established in the municipality of Luxembourg, where the municipal rate applied is 225%, the nominal charge breaks down as follows:

These rates are nominal: your actual burden depends on tax adjustments, loss carry-forwards, exempt participations and any tax credits. We quantify your position before each advance-payment deadline rather than once the accounts are closed.

Net wealth tax and minimum tax

Net wealth tax (NWT) applies to taxable net wealth at a rate of 5 per mille up to €500,000,000. Above that threshold, it equals €2,500,000 plus 0.5 per mille of the excess portion.

Since tax year 2025, the minimum NWT has been simplified: it now has only three brackets, based on the total of the last closing balance sheet of the year preceding the assessment date.

• €535 where the balance sheet total does not exceed €350,000;
• €1,605 where the balance sheet total exceeds €350,000 without exceeding €2,000,000;
• €4,815 where the balance sheet total exceeds €2,000,000.

Two changes are worth noting:

• The specific band that targeted companies whose financial fixed assets, related receivables, transferable securities and bank balances exceeded 90% of the balance sheet has been abolished: participation companies now fall under the same scale as any other company.
• Minimum NWT is reduced by the CIT, increased by the employment fund contribution, due in respect of the previous tax year.
• Under tax consolidation, the total minimum NWT of the group may not exceed EUR 32,100.

VAT and cross-border transactions

The Luxembourg VAT regime requires particular attention, especially for businesses carrying out intra-Community or international transactions. We support you on:

• VAT registration
• Ongoing filing obligations
• Checking the rates you apply
• Handling special cases: reverse charge, supplies of services, movements of goods

VAT: exemption scheme, thresholds and filing frequency

Luxembourg applies four VAT rates:

• Standard rate: 17%
• Intermediate rate: 14%
• Reduced rate: 8%
• Super-reduced rate: 3%

Taxable persons whose annual turnover excluding tax has not exceeded EUR 50,000 during a calendar year benefit from the exemption scheme and report their turnover to the administration before 1 March.

A cross-border exemption scheme also allows small businesses to benefit from the exemption in other Member States:

• Condition: annual turnover generated within the European Union not exceeding EUR 100,000;
• Any breach of this threshold must be reported to the Registration Duties, Estates and VAT Authority within 15 working days.

Beyond the exemption scheme, it is annual turnover excluding tax that governs filing frequency. The monthly regime remains the default statutory regime and the authorities alone decide which regime applies.

Tax calendar and electronic filing

The return for corporate income tax, municipal business tax and net wealth tax, known as form 500, must be filed with the competent tax office by 31 December of the year following the tax year. That deadline is the same whatever the filing method.

Since tax year 2017, filing via MyGuichet.lu has been mandatory for resident capital companies (SA, SAS, SECA, SARL, SARL-S and SE):

• A LuxTrust product is essential to access the procedure and sign the return;
• The input wizard can be pre-filled from an XML file, with supporting documents attached in PDF format;
• The tax return package includes, as a minimum, the balance sheet, the profit and loss account, the fixed assets and depreciation schedule and the statement of certain general expenses.

Companies subject to CIT also pay quarterly advances on the statutory dates of March, June, September and December, set provisionally on the basis of the latest tax assessments and then adjusted. The balance appears on the tax assessment notice and is generally payable within the month following its issue.

On the VAT side, four points call for vigilance:

• Returns and recapitulative statements have been submitted electronically via eCDF since 1 January 2020, with the account position available in eTVA;
• Invoices issued and received must be kept for 10 years from their date of issue;
• The administration may request the computerised audit file (FAIA) during an audit covering a financial year of 2011 or later;
• An appeal against an assessment notice or an estimated assessment must be filed in writing within 3 months of its notification.

Day-to-day tax advice

Beyond filing obligations, we advise you on the decisions that have a tax impact:

• Dividend distributions
• Directors' remuneration
• Choice of structure
• Exceptional transactions

Our dual accounting and tax expertise allows us to assess precisely the consequences of each option.

Support during tax audits

In the event of a request for information or an audit by the Direct Tax Administration or the Registration Duties, Estates and VAT Authority, we assist you in preparing your responses and in the dialogue with the authorities, in order to defend your position as effectively as possible.

Who is it for?

We support commercial companies and holding companies as well as the self-employed and individuals with wealth situations to structure. Each case is given personalised attention, tailored to its complexity.

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