The laws of 19 and 21 December 2007 have introduced the following main tax measures that are effective as of 1 January 2008:

  • Reduction of capital duty (payable upon incorporation and on capital increases) from 1% to 0,5%. The intention of the Luxembourg government is to abolish this capital duty by 2010;
  • Increase of investment tax credit from 10% to 12%. This credit applies to investment in tangible goods other than buildings, personal cars, etc;
  • 80% exemption on income derived from IP (royalties) (article 50bis of the Luxembourg Income Tax Code) (see our legal alert of 23 December 2007);
  • Reduction of taxation of Luxembourg residents: the income tax brackets are increased by 6%;

Please do not hesitate to contact us should you have any further questions.