Luxembourg is one of the European jurisdictions with relatively low tax rates in comparison with other countries, established through strong business-friendly policies. Tax planning is one of the most important aspects for the success of any business, especially if you consider all the tax advantages that Luxembourg has to offer for foreign investors and companies.

Some of the most important tax expenses are related to the corporate tax income, with requires careful optimization in order to enable a company to reach its true potential. To effectively support the progress of a company, it is necessary to fully understand and take advantage of the Luxembourg taxation system.

Regulatory tax reporting, ensuring compliance with the Luxembourg legislation and increased corporate tax can interfere with valuable time and resources otherwise dedicated to the company’s management. Furthermore, tax authorities can issue sanctions and penalties for companies that fail to comply with the requirements regarding taxation. Taking into account all these aspects, this why you should acquire the SIGTAX S.A. Tax Planning services.

The corporate income tax rate in Luxembourg includes the statutory rate of 22.4% and the municipal business tax. Thus, the effective tax rate for a company registered in Luxembourg City, for example is 29.22%  This may not seem like such a low tax rate, but if you are aware of the rules and regulations acting in your favor, you could be exempt from paying various taxes, or benefit from tax deductions.

For example, Luxembourg has a special regime regarding intellectual property. A Luxembourg company that acquires or creates intellectual properties benefits from a 80% income tax exemptions for derived gains or disposal of intellectual property rights.

Another important tax incentive is the fact that Luxembourg has the lowest VAT in Europe, of only 17% and various goods and services benefit from an even lower VAT.

Tax planning services provided by us include the following:

  • Corporate tax and Luxembourg VAT planning
  • Compliance for corporate tax
  • Tax accounting and preparation of provisions
  • Outsourcing of global tax
  • Due diligence for tax purposes