Tax regime for impatriate employees
Tax regime for impatriate employees
The tax regime for impatriate employees allows employers, under certain conditions, to exempt from tax certain elements of remuneration specific to impatriation situations.
For the needs of their activities, companies are required to recruit qualified employees outside the Greater Region, on the European and/or global market. In order to attract these candidates, companies are often required to cover all or part of the specific costs related to the relocation and installation in Luxembourg (e.g. moving costs, housing, schooling of children) of these highly qualified employees (and their family members).
The assumption by the employer of the costs related, directly or indirectly, to the removal and installation of the highly qualified employee and his family in Luxembourg normally gives rise to the taxation of those expenses as benefits in kind in the hands of that employee. However, the purpose of this preferential tax regime applicable (under certain conditions) to employees impatriated in Luxembourg is to exempt all or part of the benefits granted to the employee. The employer has the main role in the application of this regime since it will be up to him to exclude from the tax base the elements of remuneration eligible for tax exemption when calculating salaries.
For the needs of their activities, companies are required to recruit qualified employees outside the Greater Region, on the European and/or global market. In order to attract these candidates, companies are often required to cover all or part of the specific costs related to the relocation and installation in Luxembourg (e.g. moving costs, housing, schooling of children) of these highly qualified employees (and their family members).
The assumption by the employer of the costs related, directly or indirectly, to the removal and installation of the highly qualified employee and his family in Luxembourg normally gives rise to the taxation of those expenses as benefits in kind in the hands of that employee. However, the purpose of this preferential tax regime applicable (under certain conditions) to employees impatriated in Luxembourg is to exempt all or part of the benefits granted to the employee. The employer has the main role in the application of this regime since it will be up to him to exclude from the tax base the elements of remuneration eligible for tax exemption when calculating salaries.