HOW CAN LUXEMBOURG BE A TRUE ALTERNATIVE FOR COMPANIES?
Luxembourg offers many advantages to companies.
Contribution rate (average) (https://www.ccss.lu/cotisations/parametres-sociaux/)
Employee’s share: 12.45%
Employer’s share: 12.37% (based on class 1)
Any company based in Luxembourg is taxable on four aspects only:
Community income tax (company taxation).
A corporate income tax rate of 18% applies to company if the annual taxable income exceed 30 000 € (otherwise 15 %).
City business tax
- The city business tax is a tax that is levied only on commercial, industrial, mining and craft operations located in the Grand-Duchy of Luxembourg. It is calculated according to the operating profit of the companies and does not take into account the operator’s family expenses.
- The commercial tax, according to the operating profit, is calculated on a base that corresponds to 3% of the operating profit, the operating profit being decreased by a € 17,500 reduction for taxpayers liable to community income tax and € 40,000 for other taxpayers.
- Net wealth tax is established using the general tax base, in other words, by assessing the taxable wealth. The tax applies to opaque companies.
- It is levied on the companies’ net assets indicated on their balance sheet at the end of a tax period:
– resident opaque companies are taxed on their global wealth (wealth held in Luxembourg and abroad);
– non-resident opaque companies are taxed only on their net wealth held in Luxembourg.
- Net wealth tax is calculated based on the value of all the property, titles and assets making up the company’s assets as of 1 January each year, after deduction of any liabilities encumbering these assets. The yearly minimum wealth tax amounts to 535,00 €.
Chamber of Commerce contribution
- € 70/year minimum for a s.à.r.l. / € 140 minimum for a S.A. ( in Europe, i.e. 3, 8, 14 to 17% depending on the business sectors).
Value added tax (VAT)
The Luxembourg government has set up a company-friendly environment by setting one of the lowest VAT rates in Europe, i.e. 3, 8, 14 to 17% depending on the business sectors.
Fiscal measure in favour of Intellectual Property
In order to reinforce the competitiveness of Luxembourg, the government has introduced a fiscal measure providing for the exemption of 80% of the income generated by copyrights on software programmes and patents.
The law encourages innovation, and allows Luxembourg companies to improve the fiscal processing of the income generated by their investments in the area of intellectual property (the effective taxation rate that applies is reduced from 26,01% to about 6%, making it one of the lowest rates in Europe).
It is our wish to support you all the way throughout the growth of your company (from start-up and in its everyday management) and become a real support to the growth of your business.
Please don’t hesitate to send us your online request for further information.