CORPORATE INCOME TAX (CIT)
In 2023, the overall combined corporate income tax (CIT) rate applicable to Luxembourg tax resident companies stands at 24.94%. For corporate income exceeding EUR200,000, the CIT rate is 17%. Below this threshold, the CIT rates are structured as follows: 15% on income below EUR175,000, and EUR26,250 plus 31% on income ranging between EUR175,000 and EUR200,000. Additionally, there is a surcharge, amounting to 7% of the CIT rate, contributing to the employment fund, resulting in an effective CIT rate of 18.19%. The municipal business tax rate varies depending on the location of the statutory seat, ranging from 6.75% to 10.5%, with companies incorporated in Luxembourg City subject to a rate of 6.75%.
Furthermore, Luxembourg corporate entities are liable for an annual net wealth tax (NWT) based on their net assets as of January 1st each year. The NWT rates are as follows: 0.5% on the portion of the NWT base up to EUR500 million, and 0.05% on the portion exceeding EUR500 million. A minimum NWT of EUR4,815 is applicable if financial assets exceed 90% of the total gross assets and the balance sheet total surpasses EUR350,000. Failure to meet these criteria would result in a minimum NWT ranging from EUR535 (for total asset up to EUR350,000) to EUR32,100 (for total assets exceeding EUR20 million).
