Withholding tax on dividends in Luxembourg.
When a Luxembourg company pays a dividend, it usually withholds 15% and has 8 days to declare and pay it. When the exemption applies, how treaty refunds work, and what resident shareholders pay, every rule linked to the tax authorities.
- Withholding tax
- Shareholder receives
- Declare and pay by
withheld by the Luxembourg company on the gross dividend, unless an exemption or a lower treaty rate applies.
The company withholds, not the shareholder.
Company profits are taxed once in the company, and again when they are paid out. To collect that second tax, the distributing company withholds 15% when it pays the dividend and passes it on to the tax administration.
For a resident shareholder, the 15% is an advance on their own income tax. For a non-resident, it is the Luxembourg tax, which a tax treaty can reduce.
Partnerships don't pay dividends: their profits are taxed directly in the hands of the partners.
Sources: Guichet.lu, dividend distributions · ACD, reduced treaty rate on dividends
From the vote to the tax office, in 8 days.
The meeting decides
The shareholders' meeting formally approves the dividend, which is then recorded as such in the accounts.
The dividend is made available
The day the money is put at the shareholders' disposal starts the clock. The company withholds 15%.
Within 8 days
File the withholding tax return, form 900, and pay the tax to the ACD collection office.
The shareholder settles
Residents credit the tax against their own income tax. Non-residents may claim a treaty refund.
Sources: Guichet.lu, dividend distributions · ACD, withholding tax forms
Dividends to a parent company: often 0%.
Under the parent-subsidiary regime, a Luxembourg company paying a dividend to a qualifying parent company does not withhold anything, if the conditions are met on the day the dividend is made available.
If the 12-month holding is not completed, the exemption is cancelled afterwards.
Sources: Guichet.lu, dividend distributions · ACD, parent-subsidiary regime · ACD, reduction or refund of dividend withholding tax
Treaty rates and refunds
A tax treaty can lower the 15%. There are two ways to get the lower rate:
- At source: the company files form 901bis before or with its form 900, and withholds the treaty rate.
- By refund: the shareholder files form 901bis after 15% was withheld, by 31 December of the year after, unless the treaty allows longer.
The claim comes with a stamped bank statement showing the dividend and, for a parent company, proof of the 12-month holding.
Sources: ACD, reduced treaty rate on dividends · ACD, reduction or refund of dividend withholding tax
Only half the dividend is taxed
A resident individual is taxed on 50% of dividends from a fully taxable Luxembourg company, and certain foreign companies, then credits the 15% already withheld. The tax authorities' own example, at a 39% marginal rate:
| Gross dividend | €100.00 |
| Withheld at 15% | €15.00 |
| Income tax on half, €50 × 39% | €19.50 |
| Still to pay, €19.50 − €15 | €4.50 |
| Net after tax | €80.50 |
Finbros prepares company returns, not personal tax returns.
Paying a dividend, done properly.
The general meeting or written resolution, the accounts it relies on, and the corporate filings. Fixed prices, excluding VAT.
Annual general meeting
Standard AGM documents
Written resolution
Prepared for signature
Corporate tax returns
Prepared and filed with the tax office
Source: Finbros services and rates
Dividend tax, answered.
What company owners ask us most before paying a dividend.
Book a free first call15% of the gross dividend, withheld by the distributing Luxembourg company. A tax treaty can reduce it for non-residents, and the parent-subsidiary regime can remove it.
Sources: Guichet.lu, dividend distributions · ACD, reduced treaty rate on dividends
Within 8 days of the dividend being made available. The company files form 900 and pays the tax to the ACD collection office in the same period.
When they are paid to a qualifying parent company that holds at least 10% of the capital, or a stake that cost at least €1.2 million, for at least 12 uninterrupted months or commits to do so.
Sources: Guichet.lu, dividend distributions · ACD, parent-subsidiary regime · ACD, reduction or refund of dividend withholding tax
Either the company applies it at source by filing form 901bis before or with its form 900, or the shareholder claims a refund on form 901bis by 31 December of the year after the withholding, unless the treaty allows longer.
Sources: ACD, reduced treaty rate on dividends · ACD, reduction or refund of dividend withholding tax
Only 50% of dividends from a fully taxable Luxembourg company, and certain foreign companies, is taxed. The 15% withheld is credited against the income tax due.
A benefit given to a shareholder because they are a shareholder, such as an interest-free loan or a sale below value. It is added to the company's taxable profit and taxed in the shareholder's hands.
No. Partnerships don't distribute dividends: their profits are taxed directly in the hands of the partners.
Pay your dividend without the surprises.
We check whether the exemption applies, prepare the resolution and keep your filings on time. Book a free first call, Saturdays included.
Rules as they apply in November 2026. General information, not tax advice for your situation. Part of the Finbros Encyclopedia.