Luxembourg taxes
Luxembourg is a small country with a population of 549 people and its capital is Luxembourg. In the international community, this country is considered to be the tax “paradise” of Europe.
The local tax system works in such a way that a delicate balance is maintained between a high standard of living and tax rates that are sufficient to cover the main sources of expenditure to ensure that same level.
An EU member country is doing everything possible to ensure that the conditions for business development are as favorable as possible. It is precisely because of the favorable tax environment that numerous foreign companies choose Luxembourg as the main location for doing business and registering their offices, companies, and corporations here.
The main organizational and legal forms of business in Luxembourg are:
- joint stock company (société anonyme);
- limited liability company (société à responsabilité limitée);
- partnership.
If you have decided to open and register your own business in Luxembourg, then the specialists of the E-COMMERCE BROKER Company will provide you with comprehensive support in this matter. We will tell you everything about taxes in the country, We will also help you prepare financial statements for submission to the relevant institutions.
Main types of taxes in Luxembourg
Luxembourg taxpayers are clearly divided into two large groups:
- residents - the head office managing the company must be located in Luxembourg, while the company is registered in the country and has a local legal address;
- non-residents are companies conducting commercial activities on the territory of the state, but at the same time management and control over their work is carried out from the outside.
Main taxes in Luxembourg:
- Income tax - is calculated depending on whether the legal entity is a resident or not. For residents, tax is charged on all income received from activities, both in Luxembourg and abroad. Tax rates from 2020 for resident companies depend on the amount of profit:
- up to 175 thousand euros - 15%;
- from 175 to 200 thousand euros - the formula is applied: 26.250 Euros + 31% of the amount of income exceeding 174 thousand euros;
- from 200 thousand euros - 17%.
Important: if a resident company has already paid a similar tax in another country where the profit was made, then in order to avoid double taxation in Luxembourg it is no longer obliged to pay it. The main determining factor in this matter is the fact of concluding a DTT (double taxation agreement) with a foreign state.
For non-resident legal entities, tax is charged on profits received from the company's activities only in Luxembourg. However, according to the Luxembourg tax system, companies are required to pay municipal tax. In different regions it varies from 5 to 9%.
- Tax on dividends (at source) - dividends are subject to 15% tax.
- Value added tax (VAT) - the standard rate is 17%. There are also reduced rates of 14, 8, 3, 0% for certain types of activities.
Help with taxes from the E-COMMERCE BROKER Company
The company "E-COMMERCE BROKER" provides comprehensive accounting services for companies that operate in the EU, including:
- advice on taxation in Luxembourg;
- drawing up reports;
- submission of reports to the competent services.
Leave your requests to contact our company’s specialists on the website, and we will definitely contact you as soon as possible!
