Taxation in Luxembourg

For the companies that have their management headquartered in Luxembourg City, the municipal business tax is about 6.75%.

In Luxembourg, income tax is divided into eight categories: Taxpayers are classified into three main classes that depends on their personal situation: Tax is calculated with a progressive rate table, ranging from 0% to 42% depending on income.

As of 2024, the income tax applicable on class 1 taxpayers is according to the following table: Deductions are possible for, for example, job-related expenses, commuting allowances, insurance premiums, and loan interest.

An income-based tax credit for salaried employment of up to €696 applies to incomes of up to €80,000 (in class 1).

In Luxembourg, social security contributions are payable by employers and employees.