Luxembourg: Tax Developments - Reduction of Nominal Corporate Tax Rates!
Luxembourg is heading to a tax reform which is sustained by social equality, competitiveness and sustainability.
The new tax measures that the Luxembourg Government presented early this year, mainly relate to corporate and individual taxation. In particular, the corporate tax rate is to be decreased from the current 21% to 19% in 2017, and to 18% from 2018 onwards. Also, any corporate tax payer shall continue to offset any taxable income by using its tax carried forward losses, which now will be eligible for a maximum period of 17 years. It is finally noteworthy that any director’s fees paid by a Luxembourg company will fall within the scope of the VAT at a rate of 17%.
Such tax measures have been lodged before the Luxembourg parliament in July 2016 and, though slightly amended, shall enter into force as from 1 January 2017.
For any additional information, please feel free to contact:
Denis Van den Bulke, Managing Partner, DV@VDBlaw.com;
José Antonio Eguia Cobo, Associate, JE@VDBlaw.com.
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