In this edition, catch up on Luxembourg’s latest tax takeaways.

LU tax takeaways for March

1) Lower taxes for singles could be on the horizon thanks to an online petition in Luxembourg that garnered more than 5,000 signatures. In order to be discussed in parliament, petitions need a minimum of 4,500 signatures. 

The petition addresses the tax burden facing single individuals. In most countries in Europe, single persons pay less in taxes that couples. In Luxembourg, however, singles can pay as much as married individuals with two incomes. The petition will remain open until the end of April, before being brought up for discussion in parliament. 

2) On January 1, Luxembourg put into practice the EU’s 4th anti-tax avoidance directive (ATAD) and set a limit on the amount of interest businesses can deduct from taxes. The directive, proposed by the European Commission in 2016, aims to bring consistency across Europe, increase transparency and minimize overly aggressive tax planning. 

Bankers have voiced concerns that it will affect securitization vehicles, namely by requiring them to pay more taxes. The key question is whether or not capital gain is considered as income in this scenario. The answer determines if securitization vehicles can maintain their tax neutrality. The debt issuance industry has proposed a bill to the Luxembourgish government that seeks to mitigate the effects of ATAD. 

3) In other news, finance minister Pierre Gramegna promised to revisit the tax d’abbonements, a rare practice that charges a .05 percent tax on the assets of funds. 

4) As a booming economic hub, Luxembourg is forced to cope with the rapid growth that comes with success. One growing pain has been mobility, given that roughly 200,000 workers travel into the country for their shifts each day. To help tackle that challenge, Luxembourg will start offering free public transportation next year. It is also exploring the possibility of work-from-home setups with its civil servants. 

Here’s where tax questions arise. Taxation rules will have to change so that employees who physically live and work in France, for example, for a Luxembourgish company do not face new obligations from their home tax regime. 

5) Other relevant news across Europe: Germany and Netherlands voice their public commitment to back global international tax rules fit for the digital age; In Romania, the government lowered an unpopular tax on the financial assets of banks; European lawmakers are pushing to do away with so-called golden visas, which sell citizenship and residency to wealthy foreigners. 

Overall, key tax takeaways continue to revolve around the issue of EU-wide consistency and the rise of digitalization. With Europe doubling down on the single market and digital single market in the wake of Brexit and investing in new technology, expect these conversations to continue into the foreseeable future.

Fiduciary Tucci & Partners Service Spotlight:
Sustainable Success Through Accounting

For companies focused on executing and improving their core product or service, accounting can be a nuisance. Not only does expert bookkeeping and reporting prevent future crises, but it can actually improve your finances. 

After analyzing your financial situation, we build a sustainable strategy to optimize your business. Our accounting services include bookkeeping, reporting, balance-sheet forecasts, financial viability studies and budget preparation. 

Companies also come to Fiduciary Tucci & Partners for license applications, business plan creation and overall company setup. We do not just help an organization make sense of its financial situation, we turn it into a source of strength. 

Share your goals with us & ask how we can help you get there. Questions about trends, regulations & requirements? Curious about Luxembourg? Fiduciary Tucci & Partners can help answer your queries & find solutions.

+352 28 37 16 29 31