🇱🇺 Tax11 Dec 2024
Luxembourg cuts corporate income tax to 16% from 2025
Luxembourg's Parliament voted on 11 December 2024 to cut the corporate income tax rate from 17% to 16% for companies with taxable income above EUR 200,000, and from 15% to 14% below EUR 175,000, from tax year 2025. The combined rate in Luxembourg City, including the employment fund surcharge and municipal business tax, falls from 24.94% to 23.87%. A further one-point cut is planned for 2027.
The rate cut is in bill 8414, a tax relief package. Parliament passed it on the same day as bill 8388, which changed the minimum net wealth tax and other corporate tax rules.
What changed
- Corporate income tax falls to 16% for taxable income above EUR 200,000 and to 14% below EUR 175,000, with a transition band between, from tax year 2025.
- In Luxembourg City the combined rate falls from 24.94% to 23.87%.
- Bill 8388 changed the minimum net wealth tax, clarified the treatment of share-class redemptions and allows companies to opt out of the participation exemption in some cases.
Later developments
The Government has said it plans a further one-point cut, to 15%, from tax year 2027.