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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
The fiscal year begins on January 1st and ends on December 31 of the same year.
Accounting Standards
Starting on January 1, 2005, the EU ruling CE 1606/2002 imposes on all listed companies publishing their consolidated accounts a duty to establish their financial statements in I.A.S./I.F.R.S.
Accounting Regulation Bodies
The Accounting Regulatory Committee under the European Commission
Luxembourg Accounting Norms Commission
International Accounting Standards Board
Accounting Reports
The general principles of Luxembourg accounting are:
- The principle of clarity and regularity ;
- The principle of fidelity ;
- The principle of continuity.

The annual accounts consist of:
- A balance sheet ;
- A profit and loss account ;
- An appendix.

The balance sheet and the profit and loss account must be established following the scheme determined by the 4th EU directive as they have been transposed into the law. In principle, the duration of an accounting year cannot exceed one year. The closing date of the accounting year must in principle agree with that of the fiscal year, being December 31. Annual accounts must be established in one of the country's three administrative languages (French, English, Luxembourger).

Publication Requirements
The publication obligations of a company vary according to its size. For more details consult the fourth directive (78/660/CEE) as modified by the directive 2003/38/CE.

Small companies can establish a balance sheet, a profit and loss account as well as an appendix in an abridged form. They are not obliged to present a management report, contrary to other companies. They can publish only the abridged balance sheet and an appendix.
Medium companies and large companies have to publish a balance sheet, a profit and loss account, an allocation of earnings proposal, the administrators and auditor's identity, an annual report and the report of the independent auditor. The management report must contain a faithful presentation of the evolution of the company's business and situation.

In addition to this, the EU directive of July 19, 2002 orders all listed European companies to establish, starting from the 2005 accounting year, their consolidated annual accounts based on the IAS/IFRS normas.

Professional Accountancy Bodies
OEC , The Luxembourg Order of Chartered Accountants
Certification and Auditing
The control of medium and big companies must be made by one or several independent auditors of companies, appointed by the general assembly among the members of the Institute of Independent Auditors of Companies. The control of small companies must be made by an accountant appointed by the general assembly for definite duration.

KPMG, Ernst & Young, PricewaterhouseCoopers, Deloitte.

The Institute of Auditors of Companies (IRE)

Accounting News
Website of the Chartered Accountants' Order
IAS Plus

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT (Value-added Tax)
Tax Rate
17%
Reduced Tax Rate
A 3% rate applies to foodstuffs, books, pharmaceuticals, medical, passenger transport, newspapers, admission to cultural, sporting and entertainment events, hotels, restaurants; a 8% rate applies to bikes and domestic services; a 14% rate applies to advertising brochures and other prints, steam, heating and cooling, wine of grapes with a concentration of alcohol up to 13 grades, custody and management of securities,tailored clothes for men. Exports are zero-rated. Some financial, health and medical services and leasing of immovable property are exempted of VAT.
Other Consumption Taxes
Excise duties are also levied on certain products, especially on spirit. More detailed information on excise duties is available on the European Commission website. 

Learn more about Service Providers in Luxembourg on Globaltrade.net, the Directory for International Trade Service Providers.

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Corporate Taxes

Company Tax
21%
Tax Rate For Foreign Companies
no
Capital Gains Taxation
Capital gains and losses are generally treated as ordinary trading income and expense, subject to normal corporate tax. But some exceptions exist: Capital gains derived from the sale of shareholdings in other companies may be excluded from taxation.
Main Allowable Deductions and Tax Credits
Expenses are deductible for depreciation, payments to affiliates (royalties, management service fees, and interest charges paid to foreign affiliates by a Luxembourg company), and certain taxes.
Other Corporate Taxes
Real property tax, social security contributions, stamp duty, transfer tax, net worth tax, subscription tax.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Luxembourg OECD United States Germany
Number of Payments of Taxes per Year 23.0 12.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 59.0 176.0 175.0 207.0
Total Share of Taxes (% of Profit) 21.0 42.7 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

Individual tax rate Progressive rate from 0% to 40%
EUR 0 - 11,265 0%
EUR 11,265 - 13,173 8%
EUR 13,173 - 15,081 10%
EUR 15,081 - 16,989 12%
EUR 16,989 - 18,897 14%
EUR 18,897 - 20,805 16%
EUR 20,805 - 22,713 18%
EUR 22,713 - 24,621 20%
EUR 24,621 - 26,529 22%
EUR 26,529 - 28,437 24%
EUR 28,437 - 30,345 26%
EUR 30,345 - 32,253 28%
EUR 32,253 - 34,161 30%
EUR 34,161 - 36,069 32%
EUR 36,069 - 37,977 34%
EUR 37,977 - 39,885 36%
EUR 39,885 - 41,793 38%
EUR 41,793 - 100,000 39%
More than EUR 100,000 40%
Solidarity Surtax A solidarity tax of 7% of taxes (9% for taxpayers earning more than EUR 150,000).
Allowable Deductions and Tax Credits
Subject to limitations, deductions are permitted for insurance premiums for life, accident, sickness; individual pension schemes; alimonies and annuities; childcare and housekeeping cost; charitable contributions; interest on personal and mortgage loans, etc.
Special Expatriate Tax Regime
Luxembourg does not have a special expatriate tax regime for foreigners.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of countries having a tax agreement with Luxembourg.
Withholding Taxes
Dividends: 0/15%, Interest and Royalites: 0%

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Sources of Fiscal Information

Tax Authorities
Customs and Excise Tax Administration
Other Domestic Resources
Administration of Direct Taxes
Administration de l'enregistrement et des domaines (indirect taxes)
Consult Taxation trends in the European Union.

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Learn more about Taxes and Accounting in Luxembourg on Globaltrade.net, the Directory for International Trade Service Providers.

Intellectual Property

National Organizations
The body in charge of the protection of intellectual property in Luxembourg is the Service of the Intellectual property of the Ministry of the Economy.
You can obtain information on patents and trademarks with the center of public research Henri Tudor.
Concerning industrial property, Luxembourg signed the Paris Convention. Information on patents from the Center for Technological Monitoring.
Concerning trademarks, a single recording allows to protect these at the same time in Luxembourg, in Belgium and in the Netherlands.
International Membership
Signatory to the Paris Convention For the Protection of Intellectual Property
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Law on April 18, 2004
20 years Patent Cooperation Treaty (PCT)
Trademark
 
Uniform Benelux Trademark Law of December 2, 1992
10 years, indefinitely renewable for consecutive 10-year periods Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Uniform Benelux Designs Law July 13, 1973 and Community Council ruling 6/2002 of December 12, 2001, on communitarian designs or models
Five years, renewable every five years during a period of 25 years maximum  
Copyright
 
Law of April 18, 2004
For the length of the author's life and 70 years after his death Berne convention For the Protection of Literary and Artistic Works
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Benelux Law of January 1, 1971
 

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Legal Framework

Independence of Justice
The judiciary in Luxembourg is independent, however its judges are appointed by the Grand Duke.
Equal Treatment of Nationals and Foreigners
Foreign nationals can expect an impartial trial from the country’s judicial system.
The Language of Justice
The judicial languages used in Luxembourg are French, German and Luxembourgian.
Recourse to an Interpreter
Luxembourg is a multilingual country accustomed to using German, French and English interpreters.
Sources of the Law and Legal Similarities
The main source of the law is the constitution of 1868 (revised several times). The country’s legal system is based on civil law system. Luxembourg accepts compulsory ICJ jurisdiction. Being member of the European Union, the country’s national law needs to comply with the conditions of the Community legislation.
Checking National Laws Online
The Luxembourg judicial portal
Judicial information of the Ministry of Justice

Learn more about Lawyers and Legal in Luxembourg on Globaltrade.net, the Directory for International Trade Service Providers.

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Standards

National Standards Organizations
ILNAS, The Luxembourg Institute for Normalization, Accreditation, Product Safety and Quality depends on the Ministry of Economy and external trade.
Integration in the International Standards Network
The body of standardization and certification is the The Luxembourg Institute for Normalization, Accreditation, Safety and Quality of Products and Services (ILNAS). Luxembourg is a member of the European Committee of Standardization (CEN), the European Committee of Electronic Standardization (CENELEC), the ETSIStandardization of Telecommunication (ETSI), the International Organization of Standardization (ISO) and the International Electrotechnics Commission .
Certain products, whatever their origin is, should be submitted to the technical rules which give rise to a ratification meeting EC standards.
Classification of Standards
Luxembourg upholds international standards (ISO, IEC), European standards (CE), and newly created national standards (ILNAS/OLN).
Online Consultation of Standards
A catalog of norms is available at the Luxembourger Standardization Body.
Certification Organizations
ILNAS The Luxembourg Institute for Normalization, Accreditation, Safety and Quality of Products and Services

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Business Practices

General Information
Kwintessential, Guide to business customs and practices
Opening Hours and Days
Businesses: from Monday to Friday from 8.30 AM to 12 AM and from 2 PM to 6 PM.

Banks: from Monday to Friday, from 8.30 AM to 4.30 PM and some of them are open on Saturday from 9 AM to 1 PM.

 

Public Holidays

New Year's Day January 1
Holy Friday March/April
May Day May 1
Ascension May
Whit Monday May/June
National Holiday June 23
Assumption August 15
All Saints Day November 1
Christmas Day December 25
Saint Stephen's Day December 26
 
 

Periods When Companies Usually Close

New Year's Day January 1
Holy Friday A weekend in March/April
Easter Monday A weekend in March/April
National Holiday June 23
Christmas holidays  December 25 and 26
 

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Last Updates: January 2015