Luxembourg Tax-Related Measures For 2013

On 7 November 2012, the government deposited a bill of law with the Luxembourg Parliament introducing the tax-related measures formerly announced. Subject to amendments which may be made during the legislative procedure, the proposed amendments will in principle apply as from 1 January 2013. An updated newsletter will be published when the law is adopted.

1. Increase of the minimum tax for Soparfis

   At the same time the minimum tax to be paid by Soparfis shall be increased from 1,500 euros to 3,000 euros (plus the solidarity surcharge of 7%). The overall tax shall henceforth be 3,210 euros.

   The minimum taxation will be due by each entity regardless of whether it is part of a fiscal unity or not and certain domestic tax credits will no longer be deductible from the minimum taxation.

2. Introduction of a minimum taxation for all other Luxembourg companies and non-resident corporates holding assets in Luxembourg

   Whereas previously, a lump-sum tax was only imposed on unregulated Luxembourg resident entities with a collective character ("organismes à caractère collectif") holding certain financial assets (so-called Soparfis), it is now contemplated to introduce a minimum corporate income tax on all Luxembourg-resident entities with a collective character or non-Luxembourg resident entities holding Luxembourg assets via a Luxembourg permanent establishment or with no such permanent establishment (e.g. real estate).

   The bill of law introduces a minimum taxation the amount of which will depend on the total closing statutory balance sheet of the relevant taxpayer and will range between 500 euros and 20,000 euros (plus a solidarity surcharge of 7%). As such, for taxpayers with a total closing balance sheet of maximum 50,000 euros, the minimum tax will amount to 500 euros and it will be capped at 20,000 euros for entities whose total closing commercial balance sheet amounts to at least 20 million euros.

3. Reduction of the tax credit for investments (bonification d'impôts pour investissement)

   After having been increased last year, the tax credit for investments will be reduced as from 1 January 2013 by 1%.

4. Increase of the marginal tax rate for Luxembourg-resident individual taxpayers

   It is proposed to increase the marginal tax rate for Luxembourg-resident individual...