Taxes - Accounting

Luxembourg

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Tax Rates | Accounting Rules

Tax Rates

Consumption taxes

Nature of the tax: VTA (Value-added Tax)
Tax rate: 15%
Reduced tax rate: A 3% rate applies to food, books and newspapers, pharmaceuticals, water, agricultural produce and some other items; a 6% rate applies to gas and electricity; a 12% rate applies to intellectual services, oils, wine and some other items. Exports are zero-rated. Some financial, health and medical services and leasing of immovable property are exempted of VAT.
Other consumption taxes: Excise duties are also levied on certain products, especially on spirit. More detailed information on excise duties is available on the European Commission website.

Corporate taxes

Tax rate

Corporate income tax (companies whose taxable income is > EUR 15,000)	21%
Corporate income tax (companies whose taxable income is not > EUR 15,000)	20%
Flat income tax on finance and holding companies	EUR 1,500
Contribution to the employment fund	5%
Municipal business tax for companies	6-12%

Tax rate for foreign companies: no
Capital gains taxation: Capital gains and losses are generally treated as ordinary trading income and expense, subject to normal corporate tax. But some exceptions exist: Capital gains derived from the sale of shareholdings in other companies may be excluded from taxation.
Main allowable deductions and tax credit: Expenses are deductable for depreciation, payments to affiliates (royalties, management service fees, and interest charges paid to foreign affiliates by a Luxembourg company), and certains taxes.
Other corporate taxes: Real property tax, social security contributions, stamp duty, transfer tax, net worth tax, subscription tax.

Individual taxes

Tax rate

Individual tax rate	Progressive rate from 0% to 38.95%
EUR 0 - 10,335	0%
EUR 10,335 - 12,084	8.20%
EUR 12,084 - 36,570	Increase of 2.05% per slice of EUR 1,749
Above EUR 36,570	38.95%
Contribution for the employment fund	2.5%

Allowable deductions and tax credit: Subject to limitations, deductions are permitted for insurance premiums for life, accident, sickness; individual pension schemes; alimonies and annuities; childcare and housekeeping cost; charitable contributions; interest on personal and mortgage loans, etc.
Special expatriate tax regime: Luxembourg does not have a special expatriate tax regime for foreigners.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: List of countries having a tax agreement with Luxembourg.
Withholding taxes: Dividends: 15%, Interest and Royalites: 0
Bilateral agreement: Luxembourg and Tunisia are bound by a double taxation treaty: yes

Signed	Ratified	Enforced
27/03/1996	Law 96-55 of 06/07/96	-

Pour aller plus loin dans vos recherches nous vous proposons de connaître les taxes locales connaître les taxes locales qui s'appliquent à votre produit.

Sources of fiscal information

Tax Authorities: Customs and Excise Tax Administration
Other domestic resources: Administration of Direct Taxes
Administration de l'enregistrement et des domaines (indirect taxes)
Consult Taxation trends in the European Union.

Accounting Rules

Tax year

The fiscal year begins on January 1st and ends on December 31 of the same year.

Accounting standards

Starting on January 1, 2005, the EU ruling CE 1606/2002 imposes on all listed companies publishing their consolidated accounts a duty to establish their financial statements in I.A.S./I.F.R.S.

Accounting regulation bodies

The Accounting Regulatory Committee under the European Commission
Luxembourg Accounting Norms Commission
International Accounting Standards Board

Accounting reports

The general principles of luxembourg accounting are:
- The principle of clarity and regularity ;
- The principle of fidelity ;
- The principle of continuity.

The annual accounts consist of:
- A balance sheet ;
- A profit and loss account ;
- An appendix.

The balance sheet and the profit and loss account must be established following the scheme determined by the 4th EU directive as they have been transposed into the law. In principle, the duration of an accounting year cannot exceed one year. The closing date of the accounting year must in principle agree with that of the fiscal year, being December 31. Annual accounts must be established in one of the country's three administrative languages (French, English, Luxembourger).

Publication requirements

The publication obligations of a company vary according to its size. For more details consult the fourth directive (78/660/CEE) as modified by the directive 2003/38/CE.

Small companies can establish a balance sheet, a profit and loss account as well as an appendix in an abridged form. They are not obliged to present a management report, contrary to other companies. They can publish only the abridged balance sheet and an appendix.
Medium companies and large companies have to publish a balance sheet, a profit and loss account, an allocation of earnings proposal, the administrators and auditor's identity, an annual report and the report of the independent auditor. The management report must contain a faithful presentation of the evolution of the company's business and situation.

In addition to this, the EU directive of July 19, 2002 orders all listed European companies to establish, starting from the 2005 accounting year, their consolidated annual accounts based on the IAS/IFRS normas.

Professional accountancy bodies

OEC

Certification and auditing

The control of medium and big companies must be made by one or several independent auditors of companies, appointed by the general assembly among the members of the Institute of Independent Auditors of Companies. The control of small companies must be made by an accountant appointed by the general assembly for definite duration.

KPMG, Ernst & Young, PricewaterhouseCoopers, Deloitte.

The Institute of Auditors of Companies (IRE)

Accounting news

Website of the Chartered Accountants' Order
IAS Plus