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Luxembourg

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

To help SMEs

  • The Luxembourg Ministry for the Economy has set-up a hotline and website with information for enterprises, which includes a FAQ on existing measures for companies, including SMEs (financial support and partial employment).
  • The government emphasized that SMEs experience more challenges related to liquidity than large companies as a result of such events. The granting of aid through the bill is subject to three conditions:
    • that an event has been recognized as having a harmful impact on the economic activity of certain undertakings during a given period;
    • that the company is experiencing temporary financial difficulties, and;
    • that there is a causal link between these difficulties and the event in question.

Start-ups:

  • A major liquidity initiative of 2.5€bn in guarantees. State backed guarantee scheme for new bank loans for up to 6 years. New credit facilities will be guaranteed at 85% by the State and 15% by the Participating Banks. Each loan will be capped to an amount of 25% of the turnover of the concerned company in 2019.
  • SNCI supports businesses in difficulties with a loan package of 600 million euros.
  • Repayable government loans: the government will grant financial aid up to EUR 500,000 in the form of a repayable advance to cover documented loss of income.
  • Non– refundable and tax-exempt direct aid of an amount of EUR 5,000 will be available for very small enterprises. This amount does not have to be paid back and is not subject to tax. The aid will take the form of a capital subsidy.
  • In order to support start-ups, changes have been made to the grant for young innovative enterprises: The State will now provide 70% co-financing for young innovative companies instead of the previous 50%, with a maximum ceiling of 800,000 euros.

Employment-related measures

(e.g. state compensation schemes, training…)

Start-ups:

  • The State pay 80% of salaries as compensation in partial unemployment schemes and also providing for a fast-track procedure allowing the payment of advances
  • Up to 5000€ are available as direct support for self-employed and micro-enterprises (up to 9 employees).

Other measures and sources

Contact us

Tax: Louis Thomas – louis.thomas@kpmg.lu
Restructuring: Zia Hossen – zia.hossen@kpmg.lu
Legal: Hermann Schomakers - hermann.schomakers@kpmg.lu