Europe · EUR
Luxembourg
Reviewed 2026-06-21
Top income tax
42%
Self-employed SS
Yes
VAT
17%
Capital gains
22.89%
Exit tax
Conditional
Nomad visa
No
45
/ 100
Tax efficiency34
Ease to enter57
Ease to exit42
Cost of living55
Internet30
English100
Luxembourg taxes residents on worldwide income through a steeply progressive scale running from 8% up to 42%, plus a solidarity surcharge of 7% to 9% and mandatory social security contributions of roughly 24% for the self-employed. There is no wealth tax and shares held longer than six months are generally exempt from capital gains tax unless the holding is substantial, while a generous impatriate regime can exempt half of qualifying inbound compensation. The country has no dedicated digital nomad visa, but non-EU founders can obtain a self-employed or business residence permit if they show the activity benefits Luxembourg economically.
Personal income tax
Income tax structureProgressive
Top income tax rate42%
Entry income tax rate8%
Top rate threshold$252,000
Taxation basisWorldwide
Local/state income taxYes
Social security
Self-employed social securityYes
Employee SS rate12.2%
Employer SS rate12.5%
Indirect & other taxes
VAT standard rate17%
Capital gains rate22.89%
Long-hold CGT exemptionYes
Wealth taxNo
Inheritance/gift taxYes
Inheritance top rate48%
Property taxNo
Exit & residency
Exit taxConditional
Exit tax triggerDeferred exit tax on unrealized gains in substantial shareholdings when an individual transfers tax residence out of Luxembourg; payment can be deferred for transfers within the EEA
EU/EEA deferralNo
Days to trigger residency183 days
Corporate
Corporate income tax rate16%
WHT on dividends15%
CFC rulesYes
Incentives & special regimes
Special expat regimeYes
Expat regime nameImpatriate (inpatriate) tax regime: 50% exemption of qualifying compensation up to EUR 400,000, for highly qualified inbound workers earning at least EUR 75,000
Immigration & setup
Digital nomad visaNo
Entrepreneur visaYes
Ease of setup3 / 5
Lifestyle
Cost of living index78
Internet speed135 Mbps
English proficiencyHigh
Civil liberties98
Sources
- PwC Worldwide Tax Summaries — Luxembourg Individual: Taxes on personal income
- PwC Worldwide Tax Summaries — Luxembourg Individual: Other taxes (VAT, social security, wealth, inheritance)
- PwC Worldwide Tax Summaries — Luxembourg Corporate: Taxes on corporate income
- CCSS (Centre commun de la securite sociale) — Self-employed contribution base
- Guichet.lu — Conditions of residence for self-employed third-country workers
Informational only. Nothing here is tax, legal, or financial advice. Tax rules change often and vary by personal circumstance. Verify every figure against an official source and a qualified adviser before acting. Figures are re-expressed from public sources and cited per country.