Luxembourg's headline corporate income tax (CIT) rate is 23.87% combined (CIT, solidarity surtax, municipal business tax, FY2025).
The headline personal income tax (PIT) rate is 42 plus 9% solidarity tax.
The standard VAT/GST (or equivalent consumption tax) rate is 17. Registration thresholds, zero-rated and exempt categories, and reduced rates vary by jurisdiction - see the source link below for the full detail on this jurisdiction.
An individual is a Luxembourg tax resident if they have their tax domicile there (a dwelling available for their permanent use, under circumstances suggesting intent to keep and use it - even a rented apartment can qualify) or their habitual abode - generally, an effective stay exceeding six consecutive months, even if that period overlaps two fiscal years or includes short interruptions. Executive directors and executive employees of Luxembourg companies are generally presumed resident. Residents are taxed on worldwide income; non-residents only on Luxembourg-source income.
Luxembourg's CFC regime (Article 164ter ITA, effective for tax years from January 1, 2019, implementing EU ATAD) applies where a Luxembourg taxpayer holds, directly or indirectly - alone or with related parties - more than 50% of the capital, voting rights, or profit entitlement of a foreign entity or permanent establishment, and that entity's actual tax paid is below 50% of the Luxembourg corporate tax that would apply to the same income (currently below roughly 9%, given Luxembourg's ~17% CIT rate). Where triggered, non-distributed CFC income arising from arrangements aimed at obtaining a tax advantage is included in the Luxembourg taxpayer's base and taxed at 17%, with a foreign tax credit for tax the CFC has already paid. Exclusions apply for CFCs with accounting profit under EUR 750,000 (or 10% of operating costs) or non-trading income under EUR 75,000.
Luxembourg has no statutory debt-to-equity ratio; in practice, the tax administration has long applied an 85:15 debt-to-equity ratio as an administrative benchmark for financing participations - though the Administrative Court has clarified this practice carries no binding legal force, meaning taxpayers can potentially argue for a different arm's-length ratio. Interest exceeding what a thinly capitalized structure would support can be recharacterized as a dividend, subject to 15% withholding tax. Separately, Luxembourg's ATAD-based interest limitation rule caps deductible net interest at 30% of tax-EBITDA.
Luxembourg has signed 94 double tax treaties, of which 88 are currently in force per PwC; six signed treaties (with Argentina, Cape Verde, Colombia, Ghana, Kuwait, and Oman) remained not yet in force as of the most recent verification, and a treaty with Kyrgyzstan had not yet been signed. Most Luxembourg treaties incorporate the OECD Model's Article 26.5 information-exchange provisions.