- Entity formation
- Entity management
- M&A transaction support
- Private capital & hedge fund core services
- Private capital
- Hedge fund
- Technology solutions
- Other funds services
- SPV corporate services
- Agency services
- Loan administration
- Cross capital market services
- Structures implementation and management
- Private client services
- Reporting services
Explore content
Show all >Featured articles and media

Insights | Corporate Client Services
Voluntary carbon credits bolster green bonds
25 May 2023
Read >
Featured articles and media
Show all media for Private Capital & Hedge Fund Services >Featured articles and media
Show all media for Capital Markets >Featured articles and media
Show all media for Private Clients >Featured events

Events | Virtual
Bankruptcy and Restructuring: Navigating Distress in the Evolving Markets
22 Jun 2023
Learn more >
Events | Virtual
Private Funds Industry Live, Expanding Private Funds in Global Markets
10 Jan 2023
Watch the recording >
Events | Virtual
Private Funds Industry Live, Demystifying Private Capital Funds
6 Dec 2022
Watch the recording >- Home
- Our services
- Corporate Client Services
- Entity formation
- Entity management
- M&A transaction support
- Private Capital & Hedge Fund Services
- Private capital & hedge fund core services
- Private capital
- Hedge fund
- Technology solutions
- Other funds services
- Capital Markets
- SPV corporate services
- Agency services
- Loan administration
- Cross capital market services
- Private Clients
- Structures implementation and management
- Private client services
- Reporting services
- Corporate Client Services
- Our locations
- About us
- News & Insights
- Login
Luxembourg Budget Law voted – a reduction in corporate tax rate and a refreshed tax unity regime
13 May 2019
On 25 April 2019, the Luxembourg Parliament approved the Luxembourg Budget Law 2019.
Key updates
- Corporate income tax rate reduced from 18% to 17%, applied for the 2019 tax year
- The Luxembourg tax unity regime legislation rewritten , permitting the application of the ATAD 1 interest limitation rules and clarifying and consolidating existing measures, applicable to accounting periods starting on or after 1 January 2019
Corporate income tax
Corporate income tax (CIT) rate decreased by 1%, applicable for tax year 2019. There are no changes to the solidarity surtax rate levied on the CIT rate nor to the municipal business tax rates. This change results in an overall corporate tax rate of 24.94% for companies registered in the municipality of Luxembourg City.
In addition, a reduced CIT rate of 15% for companies with a tax base of less than EUR 25,000 is now applicable to companies with a tax base less that EUR 175,000. For a tax base between EUR 175,000 and EUR 200,001, the CIT charge will be EUR 26,250 plus 31% of the basis above EUR 175,000.
Refreshed tax unity
Taking effect from tax years beginning on or after 1 January 2019, the Luxembourg income tax law governing Luxembourg tax unity has been fully rewritten, allowing for the implementation of the option offered by ATAD 1 for the application of the new 30% EBITDA interest limitation rules at the level of a tax unity, including a provision to allow excess borrowing costs deductibility up to the higher of 30% EBITDA or EUR 3 million.
The interest limitation rule application at the tax unity level is optional. It can be applied on an individual basis and the request must be made by all tax unity members. It can then not be changes during the period of the tax unity.
For existing unities, the option of interest deduction limitation application to each company individually can be applied should all companies in the group submit a consolidated joint request before the end of the first financial year where the interest expense deduction limitation rules apply in Luxembourg.
Contact us
For more information, contact our expert or reach out via [email protected].