On October 14 2015, Luxembourg’s Finance Minister Pierre Gramenga presented the country’s 2016 budget containing certain tax measures to be introduced in 2015 and 2016.
According to the International Tax Review and the Official Documents released on the government website, the following points are the proposed changes:
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Minimum corporate income tax to be replaced by minimum net wealth tax:
The government intends to abolish the Luxembourg minimum Corporate Income Tax (CIT) from 2016 and to replace it with a minimum Net Wealth Tax (NWT) of the same amount.
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Net wealth tax rules to be amended:
The o.5% NWT rate will remain applicable on net wealth which is lower than or equal to €500 million and a 0.05% NTW will apply on the part of the net wealth exceeding €500 million.
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Luxembourg IP regime to be repealed:
80% exemption to apply to income arising from qualifying IP assets and capital gains on the sale of such assets is being repealed as of July 1 2016.
100% exemption to apply to qualifying IP assets for NWT purposed will be repealed as of January 1 2017.
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Tax amnesty regime to be introduced:
If the rectified tax return is filed in 2016, the tax due will be increased by 10% of the amount of tax on the assets or income which had not been reported or;
If the rectified tax return is files in 2017, the tax due will be increased by 20% of the amount of tax due on the assets or income which had not been reported.
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Step up in value to be introduced for individuals:
Substantial shareholdings (for a participation of more than 10%) in a Luxembourg company owner by non-resident individuals and convertible loans issued by the company will, at the time the non-resident becomes a Luxembourg resident, be valued at the fair market value.
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New option for individual taxpayers to be taxed as a Luxembourg resident for the whole year.
The official documents of the Luxembourg Government can be found
here.
More information:
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