During a press conference which was held on February 29, 2016, the Luxembourg Government presented its plan for tax reforms that are supposed to enter into force on January 1, 2017.

Corporate income tax

Currently the corporate income tax rate in Luxembourg is 21% for companies which annual taxable income exceeds 15,000 Euro. For companies which annual taxable income does not exceed 15,000 Euro the Luxembourg corporate income tax rate is currently 20%.

According to the presentation, the Luxembourg Government intends to gradually decrease the corporate income tax rate to 19% in 2017 and to 18% in 2018. At the same time the Luxembourg Government proposes to increase the threshold from 15,000 Euro to 25,000 Euro. The Luxembourg Government also proposes to lower the corporate income tax rate from 20% to 15% for companies which annual taxable income does not exceed 25,000 Euro.

Minimum net worth tax

For the fiscal year 2016 Luxembourg collective entities that own qualifying holding and financing assets exceeding 90% of their balance sheet, and whose total balance sheet exceeds 350,000 Euro are subject to a minimum net worth tax of 3,210 Euro; the minimum net worth tax is 535 Euro where the total balance sheet is up to 350,000 Euro.

The Luxembourg Government intends to increase the minimum net worth tax to 4,815 Euro as per January 1, 2017.

Click here to be forwarded to a press release published on the Luxembourg Ministry of Finance in this respect (the press release is in the French language).

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