IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 31 Dec 2010 | Removal date: 30 Apr 2013
Still in force

Post-migration treatment

 On 31 December 2010, Luxembourg issued circular nr. 95/2 introducing tax exemptions for qualified expatriates seconded within international companies (i.e. established in at least two other countries).
Within the first five years from moving temporarily to Luxembourg, moving expenses, recurring expenses (annually up to 50'000 EUR for singles and 80'000 EUR for couples) and lump sum indemnities (annually up to 1'500 EUR for singles and 3'000 EUR for couples) will not be taxable for qualified expatriates. If these costs were incurred by the employer within the first five years of the employee relocating to Luxembourg, the expenses will also be deemed tax deductible.
The tax benefits may be applied only to Luxembourg entities hiring at least 20 employees. Furthermore, the qualified expatriates will have to earn annually at least 50'000 EUR to be eligible for the tax exemption.
The circular was amended on 21 May 2013 and is thus no longer classified as implemented (cf. Related Measures).
No affected trading partner has been mentioned, as, according to the Luxembourg Statistical Office, the migration inflow from any single country did not surpass 10'000 in 2009.
 

AFFECTED COUNTRIES

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