On 11 June 2024, during his speech on the State of Nation, the Luxembourg Prime Minister Luc Frieden has announced a series of measures which include the following tax measures aiming to increase Luxembourg competitiveness:
-
For corporations – To ensure that companies will continue to invest, develop themselves and contribute to job creation, it is envisaged to:
- Reduce of the corporate income tax rate from 17% to 16% as from 1 January 2025;
- Reduce the subscription tax for “Exchange Traded Funds” (ETFs) which are actively managed as from tax year 2025; and
- Improve of the tax framework applicable to start-ups in a near future;
-
For individuals – aiming for equality and continuing attracting talents to Luxembourg, it is envisaged to:
- Provide tax relief for single-parent families as from 1 January 2025;
- Adjust the personal income tax brackets to enhance the purchasing power as from the current year;
- Improve the participative premium and impatriate regime as from tax year 2025;
- Real estate - Finally, the Prime Minister presented an action plan in 10 points which aims at simplifying, accelerating and modernizing Luxembourg building procedures. The aim is, among other things, to increase the number of housing units. To that end, it is envisaged to maintain the mobilization tax (taxe de mobilisation) and to reduce for the current year taxation of capital gains derived from existing residential units.
These new tax measures are designed to boost Luxembourg’s attractiveness and support the real estate sector which is currently experiencing a severe crisis.
