Law & Numbers - News Tax

State of Nation Speech 2014

07.04.2014 (Luxembourg)

The Prime Minister Xavier Bettel announced that the tax reform had been fully discussed and will come into force on January 1, 2017 and the VAT rate will be raised from January 1, 2015.

Government’s Statement on the Economic, Social and Financial Situation of the Country

In his State of the Nation speech on April 2, the Prime Minister Xavier Bettel announced that the tax reform had been fully discussed and will come into force on January 1, 2017. According to the Prime Minister, the decision should not have impact on the competitiveness and attractiveness of the nation's economy.

The government gave up the notional interest deduction regime initially proposed in the coalition program, similar to the one in force in Belgium.

In compliance with OECD and EU principles on tax transparency and exchange of information, the government wants to maintain its position and "The reputation of the financial center must be beyond reproach," said Bettel.


Luxembourg Confirms Increase of VAT Rates as from 2015

The Prime Minister Xavier Bettel confirmed that the value added tax (VAT) rate will be raised from January 1, 2015, to reduce the deficit and to offset the loss of revenue from the abolition of VAT on e-commerce estimated at EUR 800 million and explained that the rise will generate additional revenue for the state of around EUR 350 million.

Nevertheless, the Government maintains the lowest standard VAT rate in the EU.

As a result, from the next year, the rate will rise by 2 percent as follows:
- from 15% to 17% for the standard rate
- from 12% to 14% for the intermediate rate
- from 6% to 8% for the reduced rate

The super reduced rate of 3% remains unchanged and continues to apply for the basic commodities.







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