Taxation

Luxembourgish companies are required each year to prepare and submit a set of tax filings to the relevant authorities. These filings serve to confirm the taxable income, the tax liability, and the transactions subject to VAT. They must be submitted within the legal deadlines to avoid penalties and interest for late payment.

The main obligations include:

• Corporate Income Tax (CIT), Municipal Business Tax (MBT), and Minimum Corporate Tax (MCT) filings
• VAT declarations (monthly, quarterly, or annual) depending on the applicable regime
• Compliance with deadlines set by the ACD (Administration des Contributions Directes) and the AED (Administration de l’Enregistrement et des Domaines)

Based in Luxembourg City, Atlas Fiduciaire has been assisting its clients for many years with the preparation, review, and submission of all their tax filings to ensure full compliance.

In Luxembourg, corporate taxation is based on three main taxes, applied depending on the company’s legal form and business activity. These taxes are calculated based on:

• Profit
• Company location
• Balance sheet size (in certain cases only)

They primarily concern capital companies (Sàrl, SA, SCA, etc.) as well as certain types of companies subject to collective taxation.

• Corporate Income Tax (CIT / IRC): forms the basis of corporate taxation and is applied to the net taxable profit earned during the fiscal year (capital companies and entities automatically subject to CIT).
• Municipal Business Tax (MBT / ICC): levied by the municipality where the company is established. Its rate depends on the company’s location—for example, Luxembourg City. ICC is in addition to CIT and applies to companies carrying out commercial activities under tax law.
• Minimum Corporate Tax (MCT / MBT): ensures that a company pays a minimum tax even in the absence of profit (capital companies, financial companies, SOPARFIs, and companies whose balance sheets mainly consist of financial or fixed assets).

Based in Luxembourg City, Atlas Fiduciaire has been assisting clients for many years with understanding, calculating, and managing their taxes to ensure full compliance with Luxembourg tax legislation.

In Luxembourg, companies must report VAT to the Administration de l’Enregistrement, des Domaines et de la TVA (AED). VAT filings are completed entirely online, and the filing frequency depends on the company’s turnover: some businesses report monthly, others quarterly, and some annually. Transactions must be correctly accounted for according to the applicable rate, and all reporting obligations must be met to ensure compliance.

Key points regarding VAT in Luxembourg:

• Filings are submitted electronically via the AED platform
• Filing frequency depends on turnover (monthly, quarterly, or annual)
• Applicable rates include the standard rate, intermediate rate, reduced rate, and super-reduced rate

Based in Luxembourg City, Atlas Fiduciaire has been assisting clients for many years with the preparation and submission of their VAT returns, ensuring the correct application of rates and full compliance with legal obligations.

Luxembourg offers a particularly attractive tax environment for companies and self-employed professionals. Its legal framework supports investment, promotes growth, and encourages value creation through deductions, depreciation schemes, and stable taxation.

These advantages help reduce the overall tax burden while providing entrepreneurs with a high degree of predictability.

The key tax benefits include:

• Favorable or accelerated depreciation options depending on the type of investment
• Specific deductions applicable to business expenses for companies and self-employed professionals
• A business-friendly tax framework that is clear, stable, and internationally recognized

Based in Luxembourg City, Atlas Fiduciaire has been assisting companies and self-employed professionals for many years in identifying and leveraging the tax advantages best suited to their activities.

Company directors in Luxembourg can deduct expenses that are directly related to the performance of their professional activity, provided they are justified and reasonable. These costs must be genuinely necessary for the business and properly documented to be accepted by the tax authorities.

Deductibility is intended to account only for expenses that are essential to operations and incurred within the scope of the business activity.

• Professional expenses necessary for the activity (travel, business meals, equipment, training, work tools, etc.)
• Professional use of a vehicle or equipment, provided sufficient justification is available

Based in Luxembourg City, Atlas Fiduciaire assists directors in identifying, documenting, and optimizing expenses that are legally deductible for their business.

During a tax audit in Luxembourg, the authorities require the company to provide complete and transparent documentation of its accounting and financial situation. The goal is to verify the consistency between submitted filings, accounting entries, and available supporting documents.

Thorough preparation helps streamline the audit process, allowing the company to respond promptly to the inspector’s requests and minimize any risk of tax adjustments.

The documents typically required include:

• Annual accounts, accounting journals, and detailed entries
• Purchase and sales invoices
• Bank statements
• Contracts
• Supporting documentation for transactions

Based in Luxembourg City, Atlas Fiduciaire assists companies in preparing and organizing the documents required for tax audits, ensuring full compliance with the administration’s requirements.