Luxembourg: changes in tax legislation in 2017 - 2018.
The end of the year is a time not only for summing up, but also for defining new work rules for the coming period (the article is dated December 2016). In particular, in mid-December, the Luxembourg Parliament approved draft tax law reform projects.
What awaits the Luxembourg business?
Corporate income tax rates: in order to increase the competitiveness of companies, the income tax rate has been reduced from 21% (currently) to 19% in 2017 and to 18% in 2018. As a result, the general tax rate is reduced from 29.22% (taking into account the joint rate of 7% and the municipal rate of 6.75%) to 27.08% in 2017 and 26.01% in 2018.
In order to encourage Start-up projects, a reduced income tax rate of 15% is introduced, provided that the taxable profit of the company does not exceed 25,000 euros (compared to 20% at present for profits not exceeding 15,000 euros).
The amount up to which the maximum rate is not applied has been increased from 15,000 to 30,000 euros. For profits ranging from 25,000 to 30,000 euros, tax is levied in the amount of 3,750 euros plus 39% of the excess of 25,000 in 2017 and 33% in 2018.
Investment tax credit: in order to stimulate the investment activity of companies, the investment tax credit rate has been increased from 12% to 13% for additional investments, from 7% to 8% for ordinary investments (limit of 150,000 euros).
In addition, since January 2017, this regime applies to assets used in the territory of another state that is a member of the European Economic Area (EEA).
The tax rate on dividends paid to resident individuals increases from 10% to 20%.
Detailed information on taxation of companies and individuals in Luxembourg can be obtained by asking questions of interest by e-mail: info@dv-consulting.net.
