Luxembourg - Amendments to Direct Taxation with Retroactive Effect are Presented

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Luxembourg - Amendments to Direct Taxation with Retroactive Effect are Presented
On 5 March 2019, the Budget 2019 was presented by the Minister of Finance to the parliament. The amendments which will apply retroactively from 1 January 2019, are summarized below.
 
(i) The standard corporate income tax rate will be reduced from 18% to 17%. As a result the combined corporate income tax rate including the surcharge for the employment fund and the municipal business tax will be reduced from 26.01% to 24.94%.
 
(ii) From 1 January 2019, Luxembourg has implemented the interest deduction limitation of the EU ATAD 1. The maximum deduction is equal to 30% of the EBITDA or EUR 3 million.

(iii) The Bill clarifies the possibility to reduce the tax liability at fiscal unity level by making losses and accruing tax credits before or during the period of tax consolidation.

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