vs
Germany vs Luxembourg Tax Comparison
Side-by-side comparison of tax rates and systems
Tax Rate Comparison
Rate Comparison
Top Income Tax
Germany45%
Luxembourg42%Lower
Corporate Tax
Germany30%
Luxembourg23.9%Lower
Capital Gains
Germany26.4%
Luxembourg21%Lower
VAT / Sales Tax
Germany19%
Luxembourg17%Lower
| Category | Germany | Luxembourg |
|---|---|---|
| Tax System | Progressive | Progressive |
| Top Income Tax | 45% | 42% |
| Corporate Tax | 30% | 23.9% |
| Capital Gains | 26.4% | 21% |
| VAT / Sales Tax | 19% | 17% |
| Crypto Tax | Yes | Yes |
| Wealth Tax | No | No |
| Tax Treaties | 95 | 85 |
| Currency | EUR | EUR |
The bottom line: Germany vs Luxembourg
Luxembourg has the lower headline rate on 4 of the four main taxes (income, corporate, capital gains and VAT), making it the lighter-taxed of the two on paper. Germany runs a progressive tax system, while Luxembourg uses a progressive one. Germany has the wider tax-treaty network (95 agreements), which can reduce withholding tax on cross-border income.
- Income tax: Luxembourg is lower (45% vs 42%)
- Corporate tax: Luxembourg is lower (30% vs 23.9%)
- Capital gains tax: Luxembourg is lower (26.4% vs 21%)
- VAT / sales tax: Luxembourg is lower (19% vs 17%)