🇱🇺 Luxembourg Tax Guide - Income Tax, Corporate Tax & Special Regimes

Top income tax 42.0% effective 45.8%

Corporate tax 16.0%

TVA 17.0% standard rate

Tax residency 183 days 88 tax treaties

Luxembourg tax profile

Data year: 2026

Tax system: Worldwide Worldwide taxation for residents on employment, business, investment and other income. Classes 1 (single), 1a (single parent or age 65+) and 2 (married or civil partners) use different effective schedules. Employment fund solidarity surcharge of 7% on computed tax, rising to 9% on income above EUR 150,000 (classes 1/1a) or EUR 300,000 (class 2).
Top PIT rate: 42.0% (eff. 45.8%)
Corporate tax rate: 16.0%
TVA: 17.0%
Capital gains tax: 22.9% Short-term gains on movable property (under six months) taxed at progressive PIT rates. Long-term gains on material participations (>10% held in the prior five years) taxed as extraordinary income at half the average rate (maximum 22.89% including solidarity). Real estate gains within five years of acquisition taxed at progressive rates; longer holding periods use reduced rates and allowances.
Social security (employee): 13.0%
Social security (employer): 13.0%
Social security cap (annual): EUR 166,280
Dividend withholding: 15.0%
Interest withholding: 0.0%
Royalty withholding: 0.0%
Wealth tax: 0.50%
Inheritance tax: 48.0%
Treaty count: 88

Personal income

Special regimes
Name	Type	Rate/amount	Duration	Status
Impatriate tax regime 50% exemption on qualifying employment compensation, capped at EUR 400,000 of in...	Percentage exemption	No rate or amount recorded	9yr	Active

Participation Exemption

Days threshold: 183 days
Residency rules: Resident if domiciled or habitual abode is in Luxembourg. Employment income of non-residents is Luxembourg-taxable when work is exercised or salary is paid from Luxembourg; treaties typically exempt short stays under 183 days in a calendar year when remuneration is not borne by a Luxembourg entity.
Exit tax: Yes Companies and individuals transferring assets, a business or tax residence abroad may trigger exit tax on latent gains (Article 38 LIR, ATAD-aligned). Payment may be deferred in up to five annual instalments only for qualifying EU/EEA transfers with mutual recovery assistance; otherwise tax is due on exit.
CFC rules: Yes CFC rules under Article 164ter LIR (ATAD): Luxembourg companies and permanent establishments include undistributed income of controlled foreign entities when tax is less than half the Luxembourg rate and arrangements are non-genuine.

PwC Luxembourg Tax Summary (accessed Oct 9, 2026) PIT brackets, solidarity surcharge, CIT, VAT, WHT, impatriate regime, capital gains, filing
CCSS social parameters (accessed Oct 9, 2026) 2026 pension, health and dependency contribution rates; annual contribution ceiling
LIR coordinated text 1 January 2026 (accessed Oct 9, 2026) Official income tax law text; PIT tariff unchanged for 2026 vs 2025 index adjustment

AL Albania Unique Permit for Digital Mobile Workers	$610/mo
EC Ecuador Digital Nomad Visa (Visa Nómada)	$1,446/mo
ME Montenegro Digital Nomad Residence Permit	$1,460/mo
MU Mauritius Premium Visa	$1,500/mo

GE Georgia Small Business Status (1% Tax)	1%
JE Jersey High Value Resident (HVR)	1%
UZ Uzbekistan IT Park Resident Status	1%
SO Somalia Presumptive Tax Regime (PTR)	1.5%