On 11 June 2024, Prime Minister Luc Frieden delivered before the Luxembourg Parliament (Chambre des Députés) his first general policy statement on the state of the nation (the “Statement”).
In his Statement, the Prime Minister announced specific and general tax measures to be adopted within the next couple of years. These measures may be summarised as follows:
For companies
- As of 1 January 2025, the maximum corporate income tax (impôt sur le revenu des collectivités) rate will be lowered down to 16% (instead of 17% currently).
- Registration tax (tax d’abonnement) for actively managed exchange-traded funds (ETF) will also be lowered next year (without further details).
For natural persons
- As of 1 January 2025, the progressive income tax scale will be adjusted by 2.5 additional indexation tranches. This means that the amounts of net income on which the different tax rates will apply will be increased by 6.4%.
- The government is also contemplating changing the tax system by 2026 to keep a single tax class (instead of the classes 1, 1a and 2 currently existing). In the meantime, single-parent families will receive a tax allowance (to be proposed by the Minister of Finance).
- The profit-sharing scheme and the impatriation scheme will be made more attractive. The new terms are to be defined this year and applied as of next year.
- Most of protective shields put in place in Luxembourg to contain energy prices will be cancelled on 1 January 2025. However, persons with low income will receive additional support, notably through the energy tax credit and energy allowance, which will be increased.
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