Luxembourg Corporate Income Tax
Detailed corporate income tax rates and rules for Luxembourg in 2026.
Luxembourg corporate income tax (IRC) is 17% (15% on the first €175,000). A municipal business tax (ICC) averaging 6.75% in Luxembourg City and a solidarity surcharge of 7% on the IRC bring the combined rate to approximately 24.94%. The participation exemption provides full exemption for dividends and capital gains from qualifying subsidiaries (minimum 10% or €1.2 million acquisition cost, held for 12 months).
Standard Rate
17%
Small Business Rate
15%
Additional Notes
Luxembourg's IP regime provides an 80% exemption for net income from qualifying IP, resulting in an effective rate of approximately 5.2%. The country is a global leader in investment fund structuring, with tax-neutral vehicles (SICAVs, SICAFs, SCSs). Luxembourg has implemented the EU Anti-Tax Avoidance Directives and OECD BEPS measures. Minimum net wealth tax of €535 to €32,100 applies depending on financial assets.
How Luxembourg Corporate Tax compares
Luxembourg’s corporate tax rate of 23.9% is the 110th highest of 203 countries TaxAtlas tracks, above the global average of 22.2% and Europe’s regional average of 19%.
