- Corporate Income Tax Rate Reduction: The Corporate Income Tax (CIT) rate will be reduced by 1% from 24.94% to 23.87% for companies with taxable income exceeding €200,000, effective for the tax year 2025.
- Interest Limitation Rules Clarification: New amendments clarify the interest limitation rules for companies not part of a consolidated group, allowing them to deduct exceeding borrowing costs based on their equity-to-assets ratio compared to single company groups starting from financial years beginning January 1, 2024.
- Net Wealth Tax (NWT) Changes: A new minimum NWT regime will be implemented for Luxembourg-resident companies, ranging from €535 to €4,815 based on balance sheet totals, effective for the tax year 2025.
- Tax Credits and Exemptions: The legislation extends the tax credit for hiring unemployed individuals until December 31, 2026, and introduces the option to waive tax exemptions for dividend income and capital gains under certain conditions starting in 2025.
- Modernization and Digitalization: The procedural framework for private asset management companies will be updated, and mandatory electronic filing for certain tax returns will start on January 1, 2025, enhancing the efficiency of tax processes in Luxembourg.
Source EY
