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Tax Minimization in Luxembourg

Tax Minimization in Luxembourg

Updated on Thursday 14th April 2016

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tax_minimization_in_Luxembourg.jpgTax minimization in Luxembourg is the legal use of the tax system in order to reduce taxes. It can take many forms and it is different from tax evasion, which is the illegal form of escaping payment. Owners of the companies in Luxembourg who want to make sure they do not pay more than they are required can use a set of measures and effective tax planning methods to avoid unnecessary taxation or larger taxation rates. Our lawyers in Luxembourg can help you draw up an effective tax plan for minimizing tax liabilities.

Tax minimization strategies in Luxembourg

Investors in Luxembourg can arrange their investments and business activities for the purpose of reducing the amount of taxes paid. A common tax minimization strategy is to bring forward the tax deductions into the current financial year. This can be applied to corporate gifts for clients, employees in Luxembourg or business partners. It can apply to the purchase of necessary office supplies and even the renovation of the office space and/or the property in Luxembourg used as the companys' headquarters. 
Charitable donation can also be used to lower the amount of taxes due. Deductions apply for different types of donations. The most common type of donation and the easiest to quantify is the donation in cash. However, companies can also make donations in tangible and intangible assets. Our Luxembourg lawyers can advise you regarding the different types of donations and the deductible and non-deductible types.
Contributions to retirement plans are also a way to minimize the tax contributions. If possible, taxpayers in Luxembourg can consider maximizing their retirement plan contribution.

Taxes in Luxembourg

The corporate income rate in Luxembourg is calculated according to the company’s taxable income, as follows: a rate of 21% applies to a taxable income that exceeds 15,000 EUR and for lower incomes, the rate is 20%. The value added tax (VAT) in Luxembourg has a standard rate of 15% and a lower rate of 12% for certain goods and services.
Our lawyers in Luxembourg can help you with more information about the legislation for investments if you are a foreign entrepreneur interested in investing in Luxembourg. Please contact our law firm in Luxembourg for a complete offer of our services provided in Luxembourg.


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