Major corporate Tax changes about to enter into force
Major corporate Tax changes about to enter into force
Two draft laws, which introduce major tax changes for 2025, have just been passed by the Luxembourg Parliament:
We present the changes to be introduced, with a focus on the measures applicable to corporate taxpayers. These include mainly a 1% cut of the corporate income tax rate, changes to the minimum net wealth tax rules, clarifications of the tax treatment of share class redemptions and a new possibility to opt-out from the Luxembourg participation exemption regime, under certain conditions.
While we do not detail the changes impacting individual taxpayers (such as the amendments of the employee profit-share regime and of the impatriate regime, the new tax credit for cross-border workers or the adaptation of the personal income tax brackets), we remain at your disposal to discuss them further with you.
Finally, as expected given the numerous measures already taken by the Luxembourg Government by means of the two previously mentioned draft laws, the 2025 budget draft law only introduces few tax changes (including mainly an increase of the maximum amount of CO2 tax credit and tax measures to revive the housing market). These tax changes are not covered in this newsletter, but information can be provided upon request.
- Draft law 8414 (the tax relief package), which introduces tax cuts for both businesses and individuals to improve Luxembourg competitiveness, boost the Luxembourg economy and strengthen the purchasing power of citizens; and
- Draft law 8388, which introduces targeted measures to adapt the Luxembourg tax system to recentdevelopments and to clarify some of its provisions in order to improve tax certainty for taxpayers.
We present the changes to be introduced, with a focus on the measures applicable to corporate taxpayers. These include mainly a 1% cut of the corporate income tax rate, changes to the minimum net wealth tax rules, clarifications of the tax treatment of share class redemptions and a new possibility to opt-out from the Luxembourg participation exemption regime, under certain conditions.
While we do not detail the changes impacting individual taxpayers (such as the amendments of the employee profit-share regime and of the impatriate regime, the new tax credit for cross-border workers or the adaptation of the personal income tax brackets), we remain at your disposal to discuss them further with you.
Finally, as expected given the numerous measures already taken by the Luxembourg Government by means of the two previously mentioned draft laws, the 2025 budget draft law only introduces few tax changes (including mainly an increase of the maximum amount of CO2 tax credit and tax measures to revive the housing market). These tax changes are not covered in this newsletter, but information can be provided upon request.