Comparative Guides

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4. Results: Answers
Corporate Tax
Indirect taxes
What indirect taxes (eg, goods or service tax, consumption tax, broadcasting tax, value added tax, excise tax) could a corporate taxpayer be exposed to?

Answer ... Supplies of goods and services, which are deemed to take place in Luxembourg, are subject to value added tax (VAT) at the standard rate of 17% or, on certain transactions, at 14%, 8% or 3%. Some transactions, such as exports and related transport, are zero rated.

Directors’ services constitute an economic activity, whether this activity is exercised by an individual or by a company. Directors established in Luxembourg must register for VAT purposes. As a general rule, directors’ services will therefore be subject to Luxembourg VAT at the rate of 17% when invoiced by a Luxembourg director to a Luxembourg company. Withholding tax applied on fees invoiced by the director is part of the taxable basis subject to VAT.

VAT returns must be filed monthly, quarterly or annually, depending on the turnover or incoming transactions subject to VAT and the level of purchases of goods and services subject to Luxembourg VAT under the reverse charge mechanism.

In addition to VAT, some products - such as electricity, mineral oils, manufactured tobacco and alcohol - are subject to specific excise duties. Generally, excise duties are determined based on quantity.

Based on European regulations, goods entering the territory of the European Union, notably through Luxembourg, may also be subject to customs duties/import tariffs. Rates are based on the nature, the origin and the quantity of the products.

For more information about this answer please contact: Romain Tiffon from ATOZ Tax Advisers
Are transfer or other taxes due in relation to the transfer of interests in corporate entities?

Answer ... There is no stamp duty or capital duty in Luxembourg. However, a registration duty of €75 is levied on incorporation or amendments to bylaws.

The issuance of bonds and tradeable securities is exempt from registration duties.

Registration duties are levied for deeds which must be recorded in a register by a certain deadline. The duty will be triggered on private deeds only upon their use in public deeds, such as notarial deeds or bailiff’s deeds, upon their use in court or before a public authority.

The transfer of ownership of Luxembourg real estate property for consideration is subject to a proportional transfer tax of 6% of the acquisition price for Luxembourg City (ie, 5% plus a 2/10th increase), increased by 1% transcription fees. An additional 3% municipal surcharge applies in case of transfers of commercial buildings, mixed-use buildings or buildings with any other use located in Luxembourg City.

Specific rates apply where the acquirer formally declares, in the deed of purchase, that it has acquired the Luxembourg real estate property with the intent to resell it, or if the Luxembourg real estate property is transferred to a Luxembourg or foreign company in exchange for shares. In certain specific cases, the transfer of Luxembourg real estate is not subject to such duty (eg, if the contribution takes place in the context of a restructuring operation, such as a merger or a demerger, or in the event of a dissolution as the result of an insolvency procedure or other type of liquidation).

For more information about this answer please contact: Romain Tiffon from ATOZ Tax Advisers
Corporate Tax