• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Corporate Tax
  • Type: Regulatory update
  • Date: 4/4/2014

Luxembourg - Tax reform by 2017; VAT rates increase 2% 

April 4:  The Luxembourg Finance Minister this week announced during the “state of the nation” address that:
  • The Luxembourg tax system will be “globally reformed” to be effective in beginning 2017.
  • There will not be a notional interest deduction regime (like the one in Belgium).
  • Steps will be taken to comply >with international standards on tax transparency and exchange of information (as reviewed by the OECD Global Forum).

VAT rate increases

Beginning in 2015, the value added tax (VAT) rates are to increase from current rates of:

  • 15%—increase to 17%
  • 12%—increase to 14%
  • 6%— increase to 8%

The “super-reduced” VAT rate of 3% for "basic necessity products" is to remain unchanged (although adjustments will apply for the rates imposed with respect to secondary dwellings and alcoholic beverages).

Read an April 2014 report [PDF 129 KB] prepared by the KPMG member firm in Luxembourg: Etat de la Nation 2014

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