Europe
Luxembourg: tax at a glance
A residence-based system with moderate personal rates, a solidarity surcharge, the EU's lowest VAT at 17%, and a corporate tax rate cut to about 23.9% in 2025.
Worldwide (residence-based)
Last verified
Ways to relocate to Luxembourg
The residency and citizenship routes that lead here, weighed against the tax picture above.
The taxes
- Personal income (top)
- 42%Progressive, with a top rate of 42% plus a solidarity surcharge of 7-9%. That gives an effective top marginal rate of about 45.8%.
- Corporate income
- About 23.87% combined: 16% corporate income tax, a 7% solidarity surtax, and a 6.75% municipal business tax in Luxembourg City.
- Capital gains
- Speculative gains, meaning those held under 6 months, are taxed as income. Long-term gains on movable assets are exempt for holdings under 10%, and otherwise taxed at half the global rate. Real-estate gains are taxed as well.
- VAT / TVA
- 17%
- Dividends (WHT)
- 15%
- Interest (WHT)
- 0%, though a 20% domestic levy known as Relibi applies to resident individuals' savings.
- Royalties (WHT)
- 0%
- Social security (employee)
- ~12.45%
- Social security (employer)
- ~12-15%
- Wealth tax
- A net wealth tax of 0.5% applies to companies only. There is none on individuals.
- Inheritance / estate
- 0% in the direct line for equal shares, progressive otherwise, up to about 48%.
- Property tax
- A municipal property tax, the impot foncier, and it is very low.
- Other
- A solidarity surcharge of 7-9%, plus a long-term-care, or dependency, contribution of 1.4%.
How the system works
- Tax system
- Worldwide (residence-based)
- Foreign income
- Taxed (worldwide)
- Taxes by citizenship
- No
- Exit tax
- No
- CFC rules
- Yes
- CRS
- Participating
A special regime for new arrivals
The impatriate regime was reformed with effect from 1 January 2025. It now offers a flat 50% exemption of eligible gross annual remuneration up to a EUR 400,000 base, meaning a maximum exemption of EUR 200,000 per year.
The rates below are indicative headline figures (top marginal, standard, and headline rates), reviewed 2026-07. Brackets, surcharges, and state, provincial or cantonal taxes vary. Treat this as a reference map, not advice.
Sources (2)
Secondary references