A favourable legal framework and tax regime are the main advantages of operating with companies located in Luxembourg. Therefore, when recommending Luxembourg as an ideal place to set up a company, it is the tax advantages that cannot be overlooked. Luxembourg has long had the lowest VAT rates in the entire EU.
Taxes for entrepreneurs in Luxembourg
The basic rate is 17% and the reduced rate is 8%. CIT, on the other hand, ranks at two rates.
Tax on dividends paid to shareholders is 15%. The payment of dividends to a foreign company, on the other hand, may be exempt from withholding tax if the foreign company holds directly or indirectly at least 10% of the capital of the company paying the dividend (or shares with an acquisition value of at least €12 million) for a continuous period of at least 12 months.
In line with the changes to Luxembourg law, the corporate tax rate is to fall from 21% to 19% from 1 January 2017. In a second phase to take place at the beginning of 2018 , it is to be further reduced to 18%.
At the same time, a preferential CIT rate of 15% is to apply. This rate is to be used by new and innovative entities whose annual income does not exceed €25,000.
Additional fiscal benefits arise from the favourable double taxation treaty that Poland has with the Grand Duchy. For example, by virtue of Article 13(4) of the aforementioned treaty, it is possible to plan tax obligations related to real estate development activities and the disposal of real estate, using the construction of the so-called Société de patrimoine familiale (SPF) – a tax-neutral family company from the point of view of Luxembourg law.
There are several types of companies that can be registered in Luxembourg and the most appropriate form depends, of course, on the objectives and expectations of each investor. The incorporation process itself is quick and easy, as long as you have all the documents required by law, which are, first and foremost, a Luxembourg-compliant memorandum of association and a copy of a valid passport.
Offer
Using our proprietary solutions, clients achieve goals such as:
- tax planning
- protection of assets from creditors
- succession planning in the event of death
- protection of the confidentiality of assets and identity
Thanks to our cooperation with Professional Economic Intelligence “Skarbiec”, we can also offer our clients comprehensive services in the field of VIP security, protection against the leakage of confidential information and in the field of obtaining strategic market and competitive information.
Clients who use the services of Skarbiec Law Firm are also offered foreign bank accounts in reputable foreign banks and assistance in changing their tax residency to one of the countries with favourable tax regimes.
See: How does Skarbiec Law Firm differ from its competitors?
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