Luxembourg
| Category | Rank | Score |
|---|---|---|
| Overall Rank | 5 | 76.5 |
| Corporate Taxes | 25 | 53.2 |
| Individual Taxes | 20 | 59.25 |
| Consumption Taxes | 4 | 92.41 |
| Property Taxes | 13 | 65.17 |
| Crossborder Taxes | 5 | 93.92 |
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