Tax

A Luxembourg company is subject to three direct taxes: corporate income tax (CIT, impôt sur le revenu des collectivités), municipal business tax (MBT, impôt commercial communal, whose rate varies by municipality) and net wealth tax (NWT, impôt sur la fortune), plus a contribution to the employment fund. Altogether, for a company established in Luxembourg City, the overall tax burden on profits currently stands at around 24%: a competitive rate in Europe. The exact rate, however, depends on your municipality, your level of profit and your situation (holding companies, for instance, benefit from specific regimes). We calculate your projected tax charge and your advance payments, and make sure you pay only what is due.

The SOPARFI is a fully taxable company, but it benefits from the parent-subsidiary regime: subject to conditions (notably a participation threshold and a holding period), dividends received from its subsidiaries and capital gains on the disposal of participations may be exempt. That is what makes it a popular holding vehicle, in Luxembourg and internationally, all the more so as it has access to tax treaties and EU directives. But be careful: these exemptions are subject to precise conditions, which must be checked and documented for each transaction. We analyse your situation, secure the application of the regime and prepare the corresponding returns.

When a Luxembourg company distributes dividends, it must in principle withhold 15% of the amount distributed and pay it over to the Luxembourg Inland Revenue (ACD). This rate can be reduced or even eliminated, however: under the parent-subsidiary regime (subject to participation and holding-period conditions), or under the tax treaties concluded with the beneficiary's country of residence. The correct application of these exemptions or reductions must be checked before each distribution: a mistake can be costly. We validate the treatment applicable to your situation, prepare the withholding tax returns and secure your distributions.

It depends on your activity. If you carry out transactions subject to VAT in Luxembourg (supplies of goods, provision of services), registration is in principle compulsory, although a small-business exemption scheme exists below a certain turnover threshold. Conversely, some activities are exempt or outside the scope: this is notably the case for many pure holding companies, which have no economic activity within the meaning of VAT. In between, mixed situations (active holdings, intra-group services, cross-border activities) call for a case-by-case analysis. We determine your VAT position, handle your registration if required, and prepare your returns.

Yes, but within limits. Remote working by a cross-border employee is governed by tolerance thresholds: a number of days per year beyond which part of the remuneration may become taxable in the country of residence. And be careful: tax is not the only issue. Social security affiliation follows its own thresholds, which are separate and calculated differently. These rules also vary by country of residence (France, Belgium, Germany) and change regularly with agreements between states. Before introducing or extending remote working, an analysis of your situation is essential: we help you count your days, respect the applicable thresholds and secure your tax and social security position.

It all depends on your situation. Some taxpayers are required to file a return (Form 100, “Modèle 100”): notably above certain levels or types of income, where there are several sources of income, income not subject to withholding, or in certain family and cross-border situations. Others are not required to, but sometimes have an interest in filing voluntarily, as it can allow them to recover overpaid tax (actual expenses, deductible charges, couples' situations). Cross-border workers, residents, executives: we analyse your situation, determine whether you must or should file, and prepare your return.

Yes. We support the taxation of your real-estate assets, in Luxembourg and in a cross-border context: reporting of rental income, treatment of capital gains on disposal, taxation linked to ownership (direct or through a company), and the interplay between countries when the property and its owner are not in the same state, a frequent situation for cross-border workers and investors. Holding property through a structure (civil company, property holding) also raises specific tax questions that we analyse with you, in connection with our wealth advisory work.

That is precisely where tax advice comes into its own: before the decision, not after. Paying a dividend or a salary, investing directly or through a company, selling now or in two years: each option has different, sometimes significant, tax consequences. Our role is to quantify these scenarios before you decide: simulation of the tax charge of each option, analysis of the applicable international tax treaties where several countries are involved, identification of the conditions to be met, optimal timing. An informed decision upstream avoids many regrets, and often much unnecessary tax. It is the heart of our approach: advice before figures.