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Luxembourg Tax alerts

Tax alert is issued on a regular basis highlighting the latest key tax developments in Luxembourg.
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Pillar Two Law - The positive vote of the Parliament marks a key milestone

21 December 2023

On 20 December 2023, the Luxembourg parliament adopted the law implementing EU Council Directive 2022/2523 of 14 December 2022, which establishes a global minimum taxation level (15%) for multinational enterprise (MNE) groups and large-scale domestic groups within the EU (“the Pillar Two law”). The law will be applicable for fiscal years commencing on or after 31 December 2023.

Tax credits will benefit companies investing in digital and green transformation

21 December 2023

On 19 December 2023, the Luxembourg Chamber of Deputies adopted a law to modernize the current investment tax credit; it will take effect 1 January 2024. The passed law was amended during the legislative process to address the oppositions posed by the Council of State.

Now that the law has been adopted by the Parliament, the legislative process will continue until the law is published in the official journal, which should take place before the end of the year. However, this should not impact how the new measures will be applied from 1 January 2024 onward.

Pillar Two draft law— Revised draft legislation released

24 November 2023

On 13 November 2023, the Luxembourg government submitted to the Luxembourg parliament proposed amendments to the draft law (“the draft”) published on 4 August 2023 for the implementation of EU Council Directive 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%) for multinational enterprise (MNE) groups and large-scale domestic groups (“domestic groups” or “DGs”) within the EU (“Pillar Two directive” or “Pillar Two”). Those amendments transpose some of the administrative guidelines issued in February and July 2023 by the OECD that had not yet been included in the initial draft.

Constitutional Court finds minimum net wealth tax regime applicable to collective entities partially unconstitutional

23 November 2023

The Luxembourg Constitutional Court ruled in a decision issued on 10 November 2023 (case n° 185, in French only) that part of the minimum net wealth tax regime, applicable to collective entities, is contrary to the constitutional principle of equal treatment because the threshold of EUR 350,000 does not have a rational basis.

Government coalition agreement 2023 - 2028: Proposed tax measures

22 November 2023

Following legislative elections in October 2023, the new Luxembourg government officially issued the text of its 2023-2028 coalition agreement on 20 November, setting out, among others, the tax measures envisaged for the next five years. These measures must be included in draft legislation and be submitted to and approved by parliament before they can become law.

Proposals include tax rate reductions for companies and individuals.

Germany - Electronic reporting to replace physical tax vouchers submission for income paid as of 01/01/2025

18 October 2023

Effective 1 January 2025, foreign investors in Germany will no longer need to provide physical vouchers. This follows the publication of the German Withholding Tax Relief Modernization Act (Abzugsteuerentlastungsmodernisierungsgesetz or “AbzStEntModG”) on 9 June 2021.

Pillar Two draft law—Phase four: Administrative compliance obligations

10 October 2023

On 4 August 2023, the Luxembourg government submitted to the Luxembourg parliament the draft law (“the draft”) for the implementation of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%) for multinational enterprise (MNE) groups and large-scale domestic groups (DGs) within the EU (“Pillar Two directive”). The draft still needs to complete the legislative process but must be implemented by 31 December 2023 to comply with the EU deadline.

This article covers the final phase of the Pillar Two analysis, with a primary emphasis on the administrative compliance obligations that must be fulfilled by an MNE group or DG within the scope of Pillar Two. It also provides further clarification on the computation of the top-up tax and on transitional rules.

Pillar Two draft law—Phase three: Diving into the effective tax rate computation

28 September 2023


On 4 August 2023, the Luxembourg government submitted to the Luxembourg parliament the draft law (“the draft”) for the implementation of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%) for multinational enterprise (MNE) groups and large-scale domestic groups (DGs) within the EU (“Pillar Two directive”). The draft still needs to complete the legislative process but must be implemented by 31 December 2023 to comply with the EU deadline.

According to the draft, when an MNE group or DG is within the scope of the Pillar Two rules (as discussed in our phase one article), an additional amount of tax (top-up tax) would have to be paid in relation to each jurisdiction in which the effective tax rate (ETR) is below the agreed 15% minimum level of taxation.

Pillar Two draft law—Phase two: Demystification of the top-up tax

19 September 2023

On 4 August 2023, the Luxembourg government submitted to the Luxembourg parliament the draft law (“the draft”) for the implementation of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%) for multinational enterprise (MNE) groups and large-scale domestic groups (DGs) within the EU (“Pillar Two directive”). The draft still needs to complete the legislative process but must be implemented by 31 December 2023 to comply with the EU deadline.

Pillar Two draft law—Phase one: To be or not to be in scope of Pillar Two

7 September 2023

On 4 August 2023, the Luxembourg government submitted to the Luxembourg parliament the draft law (“the draft”) for implementation of EU Council Directive 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation (15%) for multinational enterprise (MNE) groups and large-scale domestic groups (“domestic groups”) within the EU (“Pillar Two directive” or “Pillar Two”).

Accounting is not taking any holiday!

25 August 2023

On 28 July 2023, the Bill of Law no. 8286 (hereafter “New Law”) was introduced, addressing topics related to accounting, annual financial statements, consolidated financial statements (and related reports of undertakings), and the abolition of the “commissaire” function.

Luxembourg publishes draft Pillar Two legislation

9 August 2023

On 4 August 2023, the Luxembourg Chamber of Deputies published draft legislation implementing the EU Pillar Two directive.

Draft legislation to modernize current investment tax credit published

18 July 2023

The Luxembourg government presented to parliament a draft law on 13 July 2023 that proposes an in-depth modernization of the current investment tax credit.

Austria: New criteria to determine beneficial ownership

20 April 2023

The Austrian Federal Ministry of Finance (BMF) decided on 15 November 2022 (Geschäftszahl: 2022-0.816.735) to use the day before the Annual General Meeting of companies, during which the dividend was resolved (AGM date -1 day), as the new criteria for determining beneficial ownership.Up until 14 November 2022, the criteria used was the ex-date -1 day.

Germany and Switzerland welcome the digital filing of tax reclaims from 1 December 2023

23 January 2023

On 19 December 2022, Germany and Switzerland signed an agreement which implies that, from 1 December 2023, the submission of Withholding Tax Reclaims in Germany for Swiss residents will exclusively be in an electronic format.

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