Luxembourg's 2024 Budget Bill was submitted to Parliament on 6 March 2024 and does not include major tax changes aimed at Luxembourg corporate taxpayers. The government will continue to implement a fiscal policy aimed at strengthening the competitiveness of the Luxembourg economy.
Luxembourg will monitor the implementation of Pillar Two's global minimum taxation rules. For further background, please see our tax flash on the Luxembourg implementation. At European level, the government anticipates further negotiations on the proposals for directives 'Unshell', 'BEFIT' and Head Offices Tax System ('HOT') as well as the "VAT in the Digital Age" initiative. The Luxembourg government will continue to follow the work of the OECD on Pillar One, which aims to reallocate certain profits of multinational enterprise groups (MNE) to the countries where their consumers are located. See our newsletter on that topic.
The Minister of Finance announced plans to decrease the current corporate income tax rate (CIT) by one percentage point as from the year 2025. The combined CIT rate applicable to corporate taxpayers established in Luxembourg-City is expected to decrease from the current headline rate of 24.94% to 23.87%. The 2024 Budget Bill does not yet include this proposal.
Luxembourg implements Pillar Two directive on time
Implementing Pillar One & Pillar Two
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
