Tax Facts About Luxembourg From A Recent Arrival (Video)

Last year, a Flemish TV show did a great spoof on Luxembourg, titled What if everybody forgot about Luxembourg? (see below with subtitles). It was uploaded shortly after I joined our Luxembourg practice and I found it hilarious. During the past few months, however, I have learned that Luxembourg has a lot to offer, and not only from a tax perspective.

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Many know Luxembourg for cheap fuel, tobacco and alcohol. Many Europeans make a stop in Luxembourg for these reasons. But the fact that almost 48% of Luxembourg's residents are foreign[1] is confirmation of Luxembourg's appeal in other areas as well. On top of that, there are many commuters from Belgium, France and Germany who come to work in Luxembourg every day. Luxembourg has a qualified and multilingual workforce, a pleasant quality of life, stable political, social and economic environments, and very competitive tax and social security regimes.

Luxembourg was one of the founding countries of the European Union, and lies in the heart of Europe. The tax updates in what Luxembourg called the Tax Reform 2017 are less extensive and less burdensome than what many countries update every year. Where there have been talks about Brexit, Frexit and Nexit, there has been no doubt that Luxembourg wants to remain in the EU and the Eurozone.

Tax-wise, Luxembourg is also great. The average tax burden in Luxembourg has just fallen again following the Tax Reform 2017, and even with the introduction of two new tax brackets for higher incomes and a phase out of the tax credit for incomes over €40,000, the average net income will still increase in 2017. Our newsletter in December explained the main changes of the reform, and this attachment shows a tax comparison for 15 different scenarios—in 14 of which the net income increased due to the Tax Reform 2017.

Recently, I compared employer costs and net salaries in 17 European countries using our KPMG LINK technology.[2] For a salary of100,000, the highest net salary is...

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