How corporate tax works in Luxembourg
Luxembourg taxes resident companies on worldwide income and non-residents on Luxembourg-source income. For tax year 2025 and beyond, the CIT rate is 14% below EUR 175,000 and 16% above EUR 200,000, with a solidarity surtax of 7% on CIT.
Municipal business tax is added on top of CIT and varies by commune. In Luxembourg City, the combined rate is 23.87% from tax year 2025.
Luxembourg also has net wealth tax for opaque companies and branches, and large MNE or domestic groups in scope of Pillar Two must deal with registration and return filing through MyGuichet.lu.
Tax rates at a glance
- CIT
- 14% / 16%
- Solidarity surtax
- 7%
- Municipal business tax
- Varies
- Combined rate
- 23.87%
- Pillar Two
- 15%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Holding companiesRegional operatorsFund structuresFoundersCross-border groups
Watch out for
- Net wealth tax still applies to many companies even though there is no minimum CIT anymore.
- Dividend distributions can trigger withholding tax, so corporate tax planning and distribution planning need to be aligned.
- Large groups in scope of Pillar Two should budget for Luxembourg registration, GIR, and top-up tax returns.
Frequently asked questions
Does Luxembourg have corporate tax?
Yes. Luxembourg has corporate income tax, municipal business tax, solidarity surtax, and company net wealth tax.
What is the corporate tax rate in Luxembourg City?
The combined CIT, surtax and municipal business tax rate is 23.87% for tax year 2025 onward.
Do large groups have extra compliance in Luxembourg?
Yes. Groups in scope of Pillar Two have registration and filing duties through MyGuichet.lu, with first deadlines in 2026 for affected calendar-year groups.