Corporate tax in Luxembourg, in plain numbers.
Corporate income tax, the employment fund surcharge and municipal business tax: how much a Luxembourg company pays on its profit, when to pay it, and what changes in 2027. Every rate is linked to the tax authorities.
- Corporate income tax€14,000
- Employment fund (7%)€980
- Municipal business tax€5,569
Three taxes on one profit.
A Luxembourg company (SARL, SARL-S, SA and the like) pays two taxes on its profit, plus a surcharge on one of them. Together they make the "combined rate" you hear about.
Corporate income tax
The national tax on company profits, known by its French initials IRC. 14% up to €175,000 of taxable income, 16% above €200,000.
Source: ACD, corporate income tax rates
Employment fund surcharge
A surcharge on the corporate income tax itself, which funds the employment fund. It has applied since 2013.
Source: ACD, employment fund surcharge
Municipal business tax
A local tax on business profits, known as ICC. Its rate depends on the commune where the company operates.
Sources: ACD, municipal business tax calculation · Guichet.lu, municipal business tax
Combined rates are our calculation from the published rates.
The rates, since 2025.
Small profits pay less. A transition band between €175,000 and €200,000 avoids a jump between the two rates.
Corporate income tax rates
| Taxable income | From 2025 | 2019 to 2024 |
|---|---|---|
| Up to €175,000 | 14% | 15% |
| €175,000 to €200,000 | €24,500 + 30% of the part over €175,000 | €26,250 + 31% |
| Over €200,000 | 16% | 17% |
Source: ACD, corporate income tax rates
Combined rate in Luxembourg City
| Taxable profit | Up to €175,000 | Over €200,000 |
|---|---|---|
| Corporate income tax | 14.00% | 16.00% |
| Employment fund (7%) | 0.98% | 1.12% |
| Municipal business tax | 6.75% | 6.75% |
| Combined rate | 21.73% | 23.87% |
Our calculation from: ACD, corporate income tax rates · ACD, employment fund surcharge · Guichet.lu, municipal business tax
What it adds up to
Tax for a company in Luxembourg City at four profit levels, with the €17,500 municipal business tax allowance. Effective rates are lower than the headline rates because of the allowance.
| Taxable profit | IRC + employment fund | Municipal business tax | Total | Effective rate |
|---|---|---|---|---|
| €50,000 | €7,490 | €2,194 | €9,684 | 19.4% |
| €100,000 | €14,980 | €5,569 | €20,549 | 20.5% |
| €250,000 | €42,800 | €15,694 | €58,494 | 23.4% |
| €1,000,000 | €171,200 | €66,319 | €237,519 | 23.8% |
Our calculation from: ACD, corporate income tax rates · ACD, employment fund surcharge · ACD, municipal business tax calculation · Guichet.lu, municipal business tax
How the commune's share is calculated.
Four steps
- Start from the taxable profit, with a few adjustments, such as removing dividends from shareholdings of at least 10%.
- Deduct the allowance of €17,500 for companies.
- Apply the base rate of 3%.
- Multiply by the commune's rate, set each year by the municipal council. Luxembourg City applies 225%.
Unlike for sole traders, a company cannot deduct municipal business tax from its profit.
It depends where you are
Each commune sets its own rate, so the same profit is taxed differently from one commune to the next. The effective rate is always 3% × the commune's rate:
The tax office publishes every commune's rate each year. We check yours for you.
Sources: Guichet.lu, municipal business tax · ACD, municipal business tax calculation
Your corporate tax year.
You pay advances during the year, file your return the year after, and settle the balance once the tax office issues its assessment.
- Jan
- Feb10th
- Mar10th
- Apr
- May10th
- Jun10th
- Jul
- Aug10th
- Sep10th
- Oct
- Nov10th
- Dec10th
Sources: ACD, tax advances · ACD, filing deadlines · ACD, loss carry-forward
There is still a minimum.
Since 2016 there is no minimum corporate income tax. Instead, every company pays a minimum net wealth tax, from €535 a year, rising to €1,605 or €4,815 depending on its balance sheet. A loss-making company still pays it.
Sources: ACD, corporate income tax rates · ACD, net wealth tax rates (§ 8 VStG)
Dividends and gains from shareholdings
Holding companies often pay little corporate tax because qualifying dividends and gains are exempt. We explain how in our guide to the Soparfi.
Corporate tax is set to fall by one point in 2027.
The 2027 budget, presented on 7 October 2026, cuts corporate income tax from 14% to 13% for small and medium businesses and from 16% to 15% for large ones. Parliament still has to vote it, and the details can change.
Source: Government of Luxembourg, 2027 budget (7 October 2026)
2027 combined rates are our calculation, if the cut is adopted as announced and municipal business tax stays at 6.75%.
Filing late costs more than the tax.
Behind on your returns? See catching up on late filings.
A surcharge of up to 10% of the tax assessed.
Interest of 0.6% per month.
A periodic penalty (astreinte), whose amount depends on how late you are.
Sources: ACD, late filing and payment · ACD, filing deadlines
Your corporate tax, done for you.
Fixed prices, excluding VAT. The tax returns build on your annual accounts, so we usually prepare both.
Corporate tax returns
Prepared and filed with the tax office
Annual accounts
Prepared and filed with the RCS
Accounting
Monthly bookkeeping, Starter plan
Source: Finbros services and rates
Corporate tax, answered.
What company owners ask us most about tax on profits in Luxembourg.
Book a free first callCorporate income tax is 14% on taxable income up to €175,000 and 16% above €200,000, with a transition band in between. A 7% employment fund surcharge is added to it, and municipal business tax comes on top: 6.75% in Luxembourg City. The combined rate in Luxembourg City is 21.73% or 23.87%.
Sources: ACD, corporate income tax rates · ACD, employment fund surcharge · Guichet.lu, municipal business tax
23.87% on profit above €200,000: 16% corporate income tax, plus 7% of that for the employment fund, plus 6.75% municipal business tax. On profit up to €175,000 it is 21.73%.
Sources: ACD, corporate income tax rates · ACD, employment fund surcharge · Guichet.lu, municipal business tax
Take the taxable profit, with a few adjustments, deduct the €17,500 allowance, apply the 3% base rate, then multiply by the commune's rate. Luxembourg City applies 225%, so companies pay 6.75% on the profit above the allowance.
Sources: ACD, municipal business tax calculation · Guichet.lu, municipal business tax
By 31 December of the year after the tax year. The same deadline applies to the municipal business tax and net wealth tax returns. You can ask the tax office for an extension, with reasons.
Source: ACD, filing deadlines
Corporate income tax advances are due on 10 March, 10 June, 10 September and 10 December. Municipal business tax advances are due on 10 February, 10 May, 10 August and 10 November.
Source: ACD, tax advances
Losses from financial years closed after 31 December 2016 can be carried forward for 17 years. Older losses, from 1991 to 2016, have no time limit. Losses cannot be carried back.
Source: ACD, loss carry-forward
Yes, the minimum net wealth tax: €535, €1,605 or €4,815 a year depending on the balance sheet. There has been no minimum corporate income tax since 2016.
Sources: ACD, corporate income tax rates · ACD, net wealth tax rates (§ 8 VStG)
The tax office can add a surcharge of up to 10% of the tax assessed. Tax paid late carries interest of 0.6% per month, and a periodic penalty can follow a final reminder.
Source: ACD, late filing and payment
The 2027 budget presented on 7 October 2026 cuts the rates from 14% to 13% and from 16% to 15%. It is not law until Parliament votes it.
Source: Government of Luxembourg, 2027 budget (7 October 2026)
Corporate tax returns cost €750 a year, excluding VAT. Annual accounts start at €750. The first call is free.
Source: Finbros services and rates
Know your tax before the tax office does.
We prepare your accounts and tax returns, check your advances and file on time. Book a free first call, Saturdays included.
Rules and rates as they apply in November 2026. General information, not tax advice for your situation. Finbros prepares tax returns for companies, not personal tax returns. Part of the Finbros Encyclopedia.