Luxembourg Approves Sweeping Policy Updates: Interest Rates, Palliative Care, and Tax Administration Reform

Interest Rate Adjustment

On November 21, 2025, Luxembourg’s Cabinet approved a new legal interest rate for 2026, now set at 3.75%. This change reflects ongoing economic policy efforts to balance local financial conditions with broader European market trends. By adjusting the rate, policymakers aim to keep Luxembourg competitive as an attractive environment for investment while managing inflation and economic growth.​

Palliative Care Reforms

The government introduced significant improvements to access and administration of palliative care. Notably, rules around deadlines and extension procedures were loosened, including the removal of a five-day deadline for physicians’ declarations and the elimination of the previous 35-day limit on care access. Patients and healthcare providers will benefit from fewer bureaucratic hurdles and a more flexible approach, ensuring faster and easier access to essential care in critical situations.​

Modernizing Tax Administration

Luxembourg is pushing further into digital transformation by modernizing its Inland Revenue Service. The new reforms focus on IT upgrades, digitization of internal procedures, and streamlined management of tax data. These changes are set to simplify compliance, enhance efficiency, and support a smarter approach to tax oversight. The move is part of a larger strategy that also includes updates to the carried interest regime, reduced corporate tax rates, and more competitive fund management regulations.​

Digital and Sustainable Finance Vision

The Finance Minister emphasized Luxembourg’s aim to establish a robust European framework for digital and green investment—a priority that aligns with the nation’s leading role in sustainable finance and fintech. By bolstering regulatory clarity and supporting innovation in these sectors, Luxembourg is working to solidify its standing as an international hub for next-generation financial products and services.​

These strategic cabinet decisions underscore Luxembourg’s commitment to efficient governance, progressive healthcare, and adaptive financial regulation—laying solid foundations for economic and social wellbeing in 2026 and beyond.