Europe

Luxembourg tax rates 2026

A residence-based system with moderate personal rates, a solidarity surcharge, the EU's lowest VAT at 17%, and a corporate tax rate cut to about 23.9% in 2025.

Worldwide (residence-based) Last verified July 2026

The taxes

Luxembourg tax rates
Personal income (top)	42%Progressive, with a top rate of 42% plus a solidarity surcharge of 7-9%. That gives an effective top marginal rate of about 45.8%.
Corporate income	About 23.87% combined: 16% corporate income tax, a 7% solidarity surtax, and a 6.75% municipal business tax in Luxembourg City.
Capital gains	Speculative gains, meaning those held under 6 months, are taxed as income. Long-term gains on movable assets are exempt for holdings under 10%, and otherwise taxed at half the global rate. Real-estate gains are taxed as well.
VAT / TVA	17%
Dividends (WHT)	15%
Interest (WHT)	0%, though a 20% domestic levy known as Relibi applies to resident individuals' savings.
Royalties (WHT)	0%
Social security (employee)	~12.45%
Social security (employer)	~12-15%
Wealth tax	A net wealth tax of 0.5% applies to companies only. There is none on individuals.
Inheritance / estate	0% in the direct line for equal shares, progressive otherwise, up to about 48%.
Property tax	A municipal property tax, the impot foncier, and it is very low.
Other	A solidarity surcharge of 7-9%, plus a long-term-care, or dependency, contribution of 1.4%.

How the system works

Tax system: Worldwide (residence-based)
Foreign income: Taxed (worldwide)
Taxes by citizenship: No
Exit tax: No
CFC rules: Yes
CRS: Participating

A special regime for new arrivals

The impatriate regime was reformed with effect from 1 January 2025. It now offers a flat 50% exemption of eligible gross annual remuneration up to a EUR 400,000 base, meaning a maximum exemption of EUR 200,000 per year.

Rates checked July 2026: the top marginal income tax rate, the standard VAT rate and the main corporate rate.