Luxembourg

Luxembourg's Rankings
CategoryRankScore
Overall Rank576.5
Corporate Taxes2553.2
Individual Taxes2059.25
Consumption Taxes492.41
Property Taxes1365.17
Crossborder Taxes593.92

Luxembourg ranks 5th overall on the 2021 International Tax Competitiveness Index, the same as in 2020.


Strengths

  • Business investments in machinery and intangibles receive better-than-average tax treatment.
  • Luxembourg applies its relatively low VAT rate of 17 percent on almost all final consumption.
  • Capital gains are tax-exempt if a movable asset such as shares was held for at least six months, encouraging long-term savings.

Weaknesses

  • Companies are limited in the time period in which they can use net operating losses to offset future profits and are unable to use losses to offset past taxable income.
  • Luxembourg has several distortionary property taxes with separate levies on real estate transfers, estates, and corporate net assets.
  • The income tax is relatively progressive with a combined top statutory rate on personal income of 45.8 percent.

Learn more about the tax system in Luxembourg

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