Learn about The Special Tax Regime for Expatriates - if you earn more than €75000

LuxembourgPosted on 29 March 2023 by Team

The Special Tax Regime for Expatriates (also known as the expat tax regime) in Luxembourg is a tax scheme that offers significant tax benefits to certain eligible individuals who are employed in the country.

Under this regime, eligible individuals can benefit from a reduced tax rate of 20% on their Luxembourg-sourced income, instead of the regular progressive tax rates that can go up to 45%. Additionally, a cap is set on the taxable income, meaning that only a portion of their income is subject to tax, further reducing the overall tax burden.

To be eligible for this scheme, individuals must meet certain criteria, including being employed in Luxembourg by a company that is registered with the Luxembourg Chamber of Commerce and has an economic activity, having been recruited from outside Luxembourg or having spent at least two years working abroad for the same employer, and not having been a tax resident in Luxembourg in the past five years.

For qualifying for this Special Tax Regime, you need to be recruited from a non-EU country and should have a gross annual salary above €75000 (reduced from €100k in the 2023 budget).

It's worth noting that this tax regime is only available for a limited period of time, with a maximum duration of five years. After this period, individuals are subject to the regular tax system in Luxembourg.

Overall, the Special Tax Regime for Expatriates in Luxembourg is designed to attract highly skilled professionals to work and live in the country by offering them significant tax benefits, making Luxembourg an attractive destination for expats.

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