Share with your friends

Luxembourg: Year-end provisions enacted, affecting corporate and individual taxpayers

Year-end tax provisions in Luxembourg

The Luxembourg Parliament in December 2015 approved tax measures affecting both corporate and individual taxpayers. These provisions generally are effective beginning 2016, with a few measures applying retroactively as from 2015.


Related content

Among the measures in the tax legislation are the following provisions:

  • Transposition of amendments to the EU Parent-Subsidiary Directive with the introduction of a general anti-abuse rule and an anti-hybrid rule into the Luxembourg domestic participation exemption regime 
  • Enlargement of the scope of the fiscal (tax) unity regime, extended to tax groups formed by "sister companies" without their parent company being part of the tax unity, thus introducing the concept of “horizontal” fiscal unity
  • Changes to the minimum corporate income tax and withholding tax rules
  • Repeal of the intellectual property regime (as recommended by the OECD in the BEPS Action 5 report)
  • Introduction of a temporary tax amnesty regime
  • Other tax measures including expanded scope of the investment tax credit and of application of the exit tax deferral measures, and a step-up basis mechanism for individuals becoming Luxembourg residents and an option to be taxed in Luxembourg for the entire calendar year for individuals being Luxembourg residents for only part of the year


Read a December 2015 report [PDF 158 KB] prepared by the KPMG member firm in Luxembourg

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal