Western Europe · Europe

Luxembourg

54moderate

Overall Score

Luxembourg is a Western Europe jurisdiction. with a standard worldwide income tax regime applicable to tax residents. Corporate profits are taxed at 17%.

Talk to an expert on Luxembourg Compare jurisdictions

Corporate Tax

17%

Personal Income Tax

45.78%

Capital Gains

26%

VAT / GST

17%

Overview

Key Data

Taxation

Personal Income Tax (max)45.78%

Personal Income Tax (min)0%

Corporate Tax Rate17%

Capital Gains Tax26%

VAT / GST17%

Dividend Tax Rate15%

Withholding Tax15%

Territorial TaxationNo

Foreign Income Exempt—

Remittance-Based Tax—

CFC RulesYes

Tax Residency Days183 days/year

Tax Treaties—

Residency & Visa

Digital Nomad VisaNo

Golden VisaNo

Retirement VisaNo

Investment VisaYes

EU MemberYes

Schengen AreaYes

EU PassportYes

Min. Days Required / Year—

Min. Monthly Income—

Min. Investment (residency)—

Citizenship Path—

Setup Difficulty—

Business & Cost of Living

Cost of Living Index82/100

Avg. Monthly Cost—

Company Formation Time—

Formation Cost (est.)—

Annual Compliance Cost—

Free Zone AvailableNo

Banking Easeexcellent

Internet Qualityexcellent

Compliance & Reputation

FATF Statuscompliant

EU Blacklist Statusnot_listed

OECD Compliance—

CRS Participant—

FATCA Compliant—

BEPS Participant—

Treaty Network Quality—

Personal Tax Residency

Tax residency in Luxembourg is generally triggered by physical presence exceeding 183 days in a calendar year. Foreign income treatment: unknown. Controlled Foreign Corporation (CFC) rules are in force. Residents who own or control foreign entities may face attribution of that entity's undistributed profits under local anti-avoidance provisions.

Major investment fund domicile (second globally after US). IP Box: 80% exemption on qualifying IP income (effective ~5.2%). Largest private banking center in Eurozone. Impatriate tax regime.

Company Setup & Business Taxation

The standard corporate income tax rate is 17%. Establishing a legal presence here involves a higher degree of administrative complexity, often requiring local legal assistance.

Banking & Financial Access

Account opening in Luxembourg can be challenging for foreign nationals or non-resident businesses, and enhanced due diligence is common practice. Internet infrastructure is excellent, with widespread fibre broadband and reliable mobile connectivity across urban and suburban areas.

Compliance & International Reputation

Luxembourg is a member of the Financial Action Task Force (FATF) and meets its anti-money-laundering standards. EU tax blacklist status: not_listed. Structures involving this jurisdiction may attract additional scrutiny or reporting obligations under EU member state rules.

Who This Jurisdiction Works Best For

Based on our scoring model, Luxembourg ranks highest for Founder / Entrepreneur and High Net Worth Individual. It offers a reasonable proposition for founder / entrepreneur (score: 57/100). It offers a reasonable proposition for high net worth individual (score: 56/100).

Legal Notice

The information on this page is for general informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and residency rules change frequently and vary significantly by individual circumstances. Always consult a qualified professional licensed in the relevant jurisdictions before making any decisions.