🇱🇺 Tax Overview — Luxembourg

Private Limited Liability Company (Sàrl)

The Sàrl pays corporate income tax (CIT) at 17% on taxable income exceeding €200,000 (15% on the first €175,000). A solidarity surcharge of 7% on CIT and a municipal business tax (taxe professionnelle communale) of approximately 6.75% in Luxembourg City bring the combined effective rate to approximately 24.94%. Luxembourg's participation exemption regime exempts dividends and capital gains from qualifying subsidiaries (minimum 10% holding or €1.2 million acquisition cost, held for at least 12 months, subject to a qualifying tax rate test). The IP box regime taxes qualifying net IP income at an effective rate of approximately 5.2%. Luxembourg securitisation vehicles benefit from a near-zero effective tax rate. VAT is charged at the EU's lowest standard rate of 17%. The country's extensive treaty network and EU directive access (Parent-Subsidiary, Interest and Royalties) make it a cornerstone jurisdiction for international structuring.