Private Client—Luxembourg—Q&A guide
Produced in partnership with Eric Fort of Arendt & Medernach
Private Client—Luxembourg—Q&A guide

The following Private Client practice note produced in partnership with Eric Fort of Arendt & Medernach provides comprehensive and up to date legal information covering:

  • Private Client—Luxembourg—Q&A guide
  • Taxation regime
  • What factors determine tax liability in your jurisdiction (eg domicile, residence or citizenship)?
  • What taxes apply to an individual’s income?
  • What taxes apply to an individual’s capital gains?
  • What taxes apply to lifetime gifts (outright or into trust) made by an individual?
  • What taxes apply to transfers on death and to an individual’s estate following death?
  • What taxes apply to an individual’s real property?
  • Are there any other direct or indirect taxes that apply to individuals in your jurisdiction?
  • How are charities taxed in your jurisdiction?
  • More...

Private Client—Luxembourg—Q&A guide

Taxation regime

What factors determine tax liability in your jurisdiction (eg domicile, residence or citizenship)?

Individuals having either their domicile (ie the place they occupy as a home under circumstances which indicate that they will retain and use it) or their usual place of abode (ie where they are present for a period of at least six months per year) in Luxembourg are deemed to be Luxembourg tax residents. Nationality is irrelevant for the purpose of determining tax residence. If an individual is a foreign national, a different definition of tax resident may apply if a double tax treaty exists between Luxembourg and the individual's home country.

Luxembourg tax residents are liable to pay tax on their worldwide income, as long as no exceptions to this apply under a double tax treaty.

By contrast, individuals who are not considered tax residents in Luxembourg will be subject to Luxembourg income tax only on income generated in Luxembourg and property located in Luxembourg.

What taxes apply to an individual’s income?

Luxembourg income tax is levied on the net taxable income, consisting of the aggregate gross income less deductible expenses, earned by the taxpayer during the tax year (which is also the calendar year). Taxpayers must file their returns by 31 March of the year following the relevant tax year.

Taxable income is divided into eight different categories:

  1. trade and business profits

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