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Luxembourg: Tax relief in response to coronavirus (COVID-19)

Luxembourg: Tax relief in response to coronavirus

The Prime Minister announced that Luxembourg would soon be in a “state of emergency”, in accordance with article 32, paragraph 4. of the Luxembourg Constitution—and thus, the government can pass any legislative text or Grand Ducal decree necessary without seeking Parliament’s approval. Any measures taken must be in relation to the management of the COVID-19 outbreak.

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Specific tax measures in the context of COVID-19 were announced on 17 March 2020.


Direct taxes

Companies and self-employed individuals that realize income from a profession, or commercial or agricultural activities can request help if they are facing liquidity issues due to COVID-19. Eligible taxpayers can file a request for: (1) cancellation (annulation) of the first and second quarterly advance payments for both (corporate) income tax and municipal business tax for 2020; and (2) a four-month extension to the deadline for the payment of (corporate) income, municipal business and net wealth taxes due after 29 February 2020, without any penalty for late payment. The tax authorities will automatically approve all eligible requests.

Furthermore, the authorities have extended the deadline to file both corporate and individual (personal) income tax returns to 30 June 2020.

Read a March 2020 report prepared by the KPMG member firm in Luxembourg

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