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Luxembourg Tax Alert 2017-19

Luxembourg Tax Alert 2017-19

Luxembourg 2017 tax reform update regarding liberal professionals (directors, lawyers, notaries, architects, doctors, and other similar regulated activities)



Xavier Martinez

Partner, Global Mobility and People Services

KPMG in Luxembourg


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Double-entry bookkeeping to be mandatory in 2017 for liberal professionals having annual net turnover exceeding €100,000.

  • Do you practice a liberal profession?1
  • Have you been keeping "simplified" accounts on a cash basis? 
  • Does your annual net turnover exceed €100,000?

Circular L.G. - A n° 63 from “Administration des Contributions Directes”, dated 15 September 2017, (hereafter “the Circular”), states the evolution of your accounting requirements, modifying the computation of your taxable profit.

Until 31 December 2016, your taxable profit could still be computed according to single-entry bookkeeping using cash basis accounting (difference between revenues and expenses) (circular LIR n°30 dated 15 May 1970).
As from 1 January 2017, should your annual net turnover exceed €100,000 you are required by the tax authorities to keep your accounting records using the double-entry bookkeeping method on an accrual basis2. Every transaction affects two different accounts: one debit and one credit, irrespective as to when revenues and expenses were respectively cashed in or paid out.

It is important to note that the Circular grants to independent workers and those falling under the paragraph 161 AO a delay until the new provisions must be applied. It also invites tax offices to ensure that this new rule is respected by the first financial year opened after 31 December 2017, at the latest.

KPMG Luxembourg can accompany you in this transition from an accounting and tax point of view. We can analyse your current situation and identify changes that will bring you into compliance with this new regulation. We can also help you implement these changes or even keep your accounts according to the double-entry method if you wish to outsource your accounting.





Jerome Luxembourger
Tel.: +352 22 51 51 6374

1. The article 91 LITL provides the list of the professional activities that fall under the fiscal qualification of the benefit of the exercise of an independent profession.

2. Article 7 of the Law dated 23 December 2016 on the application of the tax reform, Memorial A n°274 dated 27 December 2016

Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.

Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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