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14 March 2016

New tax measures for corporations in 2017

Luxembourg Government announces new tax measures for corporations in 2017

End of February 2016, the Luxembourg government announced new measures for corporations and individuals to be applied in  2017. The proposed tax reform consists essentially in an amendment of the existing tax scales, tax credit and tax rebates for individuals as well as the progressive decrease of the corporate income tax (“CIT”) rate for corporations.

 

The tax rate will be reduced:

 

Currently

2017

2018

CIT rate

Taxable profits ≥ €25K (≥€15K in 2016)

21%

19%

18%

Taxable profits < €25K (

20%

15%

15%

Effective tax rate

(incl. CIT, Municipal Business Tax in Luxembourg-City and solidarity surtax of 7%)

Taxable profits ≥ €25K (≥€15K in 2016)

29.22%

27.08%

26.01%

Taxable profits < €25K (

28.05%

22.08%

22.08%

 

 

 

 

 

 

 

 

 

 

 

Other proposed amendments for corporations are :

  • Increase of the minimum wealth tax for holding companies, from €3,210 to €4,815

  • Introduction of a tax referral on the gain realised upon the transfer of real estate businesses, under the condition that the business is continued

  • Repeal of the registration duty of 0.24% currently applicable to the registration of deeds comprising a transfer of claims

  • Increase of the RELIBI (WHT tax at source on interests paid to individuals) from 10% to 20%

 

Creatrust inhouse expertise includes comprehensive tax services:

 

 

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