New IP Regime Introduced in Luxembourg Tax Law

On March 22^nd 2018, the Luxembourg Parliament formally approved the new tax regime for intellectual property (“IP Regime”) whose content remains in line with the measures proposed in the draft law submitted by the Minister of Finance to the Luxembourg Parliament on August 4^th 2017 (please see our newsletter’s article dated October 2017 on that topic). The new IP Regime will be applicable as of the fiscal year 2018 and will provide, broadly speaking, for an 80% tax exemption on the eligible net income of qualifying IP rights, which, based on the current aggregate tax rate for Luxembourg City, could lead to an effective tax rate of 5.20% on said income.