Tax in Luxembourg: VAT, income tax, company tax, capital gains
17%
Luxembourg charges 17% TVA on most goods and services. The rate is verified against Administration de l'enregistrement, des domaines et de la TVA (AED); Luxembourg VAT Law Art. 39; EU TEDB on 19 August 2026; the top personal income-tax rate is 42% (2026 tax year, Administration des contributions directes (ACD)), and the headline company tax rate is 16% (OECD Corporate Tax Statistics).
TVA in Luxembourg
Value-added: TVA is charged on sales and reclaimed on purchases, so only the added value is taxed.
- Standard rate
- 17%
- Local name
- TVA — Value Added Tax
- Type
- VAT
- Reduced rates
- 8%
- Filing
- Quarterly / Monthly / Annual
- Authority
- Administration de l'enregistrement, des domaines et de la TVA (AED); Luxembourg VAT Law Art. 39; EU TEDB
- Current rate since
- 1 January 2024
Income tax in Luxembourg
The top personal income-tax band is 42% for the 2026 tax year.
Company tax in Luxembourg
The headline corporate income tax rate is 16%. In effect since 1 January 2026.
Indicative only: confirm with Luxembourg's national tax authority. OECD 2026: central statutory CIT 17.12%, combined (central+sub-central) 23.87%; sub-central CIT 6.75%; central rate excluding surtax 16%; small-business combined 21.73% Reduced rate 14.98%, not modelled as a small-company rate: OECD 'targeted at small business' central rate; qualifying conditions not stated in OECD data.
Capital gains tax in Luxembourg
- Shares
- Shares sold within 6 months of acquisition: speculative gain (art. 99bis LIR) taxed as ordinary income at progressive rates. Shares held more than 6 months: exempt unless the seller held a substantial participation (>10% at any time in the previous 5 years, alone or with spouse/partner and minor children); substantial-participation gains (art. 100) are extraordinary income taxed at half the global rate (art. 131(1)(c), art. 132(2)).
- Property
- Sold within 5 years of acquisition: speculative gain (art. 99bis(1)(1)(a)) taxed as ordinary income at progressive rates. Sold after more than 5 years: gain (art. 99ter) is extraordinary income taxed at half the global rate (art. 131(1)(c)), after the EUR 50,000 / 100,000 per-10-years allowance (art. 130(4)); extra EUR 75,000 allowance for a parents' main residence inherited in direct line (art. 130(5)).
- Holding period
- <= 6 months: speculative (taxable as ordinary income). > 6 months: exempt for non-substantial holdings (<=10%); taxable at half global rate for substantial (>10%) holdings.
Ask your AI assistant about tax in Luxembourg
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
- “What is the TVA rate in Luxembourg, and what is the source?”
- “Estimate income tax in Luxembourg on EUR 60,000 for 2026.”
- “What is the company tax rate in Luxembourg and how is it sourced?”
Connect in three steps, and what a connected answer looks like: Tax MCP.
Luxembourg, answered
Questions about tax in Luxembourg
- What is the TVA rate in Luxembourg?
- The standard TVA (Value Added Tax) rate in Luxembourg is 17%, verified against Administration de l'enregistrement, des domaines et de la TVA (AED); Luxembourg VAT Law Art. 39; EU TEDB on 19 August 2026. A reduced rate of 8% applies to some categories. Value-added: TVA is charged on sales and reclaimed on purchases, so only the added value is taxed.
- What is the top income tax rate in Luxembourg?
- The top personal income-tax band in Luxembourg is 42% for the 2026 tax year, verified against Administration des contributions directes (ACD) on 6 October 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in Luxembourg?
- The headline corporate income tax rate in Luxembourg is 16%, as published by OECD Corporate Tax Statistics (checked 6 October 2026, verification pending). Indicative only: confirm with Luxembourg's national tax authority. OECD 2026: central statutory CIT 17.12%, combined (central+sub-central) 23.87%; sub-central CIT 6.75%; central rate excluding surtax 16%; small-business combined 21.73% Reduced rate 14.98%, not modelled as a small-company rate: OECD 'targeted at small business' central rate; qualifying conditions not stated in OECD data.
- How is capital gains tax charged in Luxembourg?
- In Luxembourg, the regime is mixed, verified against Administration des contributions directes (impotsdirects.public.lu) - LIR coordinated text in force 1 Jan 2026 (updated 08/05/2026) on 6 October 2026. On shares: Shares sold within 6 months of acquisition: speculative gain (art. 99bis LIR) taxed as ordinary income at progressive rates. Shares held more than 6 months: exempt unless the seller held a substantial participation (>10% at any time in the previous 5 years, alone or with spouse/partner and minor children); substantial-participation gains (art. 100) are extraordinary income taxed at half the global rate (art. 131(1)(c), art. 132(2)). Holding period: <= 6 months: speculative (taxable as ordinary income). > 6 months: exempt for non-substantial holdings (<=10%); taxable at half global rate for substantial (>10%) holdings.
- Can an AI assistant look up tax rates for Luxembourg?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the TVA rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- Administration de l'enregistrement, des domaines et de la TVA (AED); Luxembourg VAT Law Art. 39; EU TEDB
- Administration des contributions directes (ACD)
- OECD Corporate Tax Statistics
- Administration des contributions directes (impotsdirects.public.lu) - LIR coordinated text in force 1 Jan 2026 (updated 08/05/2026)
Last checked 6 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
See every rate side by side in the tax rates table, put Luxembourg next to another country in the comparison tool, or read the tax facts.
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