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Luxembourg's 2018 Budget Presented

by Ulrika Lomas,, Brussels

13 October 2017

A number of minor tax measures were included in Luxembourg's 2018 Budget, tabled in the Chamber of Deputies by Minister of Finance Pierre Gramegna on October 11.

The main measure affecting businesses in the 2018 Budget was the inclusion of an investment tax credit for companies which purchase electric cars. In addition, individuals who buy hybrid cars will receive an allowance of EUR2,500 (USD2,960) from 2018. In order to qualify for the allowance, buyers must purchase vehicles which emit less than 50g of CO2 per kilometer.

With regards to individual taxation, rules will be made more flexible so that couples can decide whether to be taxed individually or jointly.

In addition, measures are included to ensure that cross-border workers will be taxed as residents of Luxembourg.

Notably, Gramegna also said that the Government continues to analyze the European Commission's decision that Luxembourg provided a selective tax advantage to Amazon for several years under a tax ruling issued in 2003, in breach of European Union rules on state aid.

Luxembourg has already said that Amazon was taxed in accordance with the tax rules applicable at the relevant time, and Gramegna told the chamber that the Government is keeping its legal options open.

TAGS: individuals | Finance | tax | investment | Luxembourg | transfer pricing | Europe

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