Corporate income tax
Three layers make up what a Luxembourg company pays on profits: corporate income tax, a solidarity surcharge on that tax, and a municipal business tax that depends on the commune. Combined, a company seated in Luxembourg City pays 23.87% from tax year 2025 onwards.
Last verified 23 July 2026
Official sources only, linked per figure
The three layers
Corporate income tax (IRC) — standard rate
taxable income above €200,000, tax year 2025 onwards
16%
ACD - charge fiscale globale des collectivités, tax year 2025 onwards · verified 23 July 2026
Corporate income tax — reduced rate
taxable income up to €175,000
Corporate income tax — transitional band
€24,500 + 30% of the income above €175,000 (taxable income between €175,000 and €200,000)
Loi du 20 décembre 2024 (Mémorial A 589), art. 12 amending art. 174 LIR · verified 24 July 2026
Employment fund surcharge
levied on the CIT amount, not on profits
7%
guichet.public.lu - corporate income tax, contribution to the employment fund · verified 23 July 2026
Municipal business tax — base rate
3%
guichet.public.lu - communal business tax, base rate set by law · verified 23 July 2026
Municipal business tax — Luxembourg City
base rate × the city's 225% coefficient; other communes differ
6.75%
guichet.public.lu - communal business tax, Luxembourg City coefficient 225% · verified 23 July 2026
Municipal business tax — allowance
deducted from the base for companies subject to CIT
€17,500
guichet.public.lu - communal business tax, allowance for entities subject to CIT · verified 23 July 2026
Combined rate, Luxembourg City
23.87%
ACD - charge fiscale globale, company seated in Luxembourg City, 2025 onwards · verified 23 July 2026
In plain terms: on €100,000 of taxable profit, a Luxembourg City company pays about €23,870 across all three layers. The three taxes arrive as one economic burden even though they are assessed separately — budget the combined rate, not the 16% headline.
Reading the combined rate
The 23.87% headline is arithmetic, not a separate tax: 16% CIT, plus 7% of that CIT for the employment fund (1.12 points), plus 6.75% municipal business tax in Luxembourg City. Companies seated in other communes apply their own coefficient, so the combined figure moves with the registered office.
Small profits pay less: the 2025 reform set the reduced rate at 14% for taxable income up to €175,000 (law of 20 December 2024, Mémorial A 589), with a transitional formula up to €200,000. Note that guichet.lu's overview pages still showed the pre-2025 bands at our last check — which is why the rows above cite the law itself.
Returns, payments & losses
Tax return deadline
31 December of the year following the tax year (CIT and municipal business tax returns, since tax year 2022)
ACD - dépôt des déclarations, délais · verified 24 July 2026
Advance payments
quarterly advances fixed by the ACD; due dates per the official fiscal calendar (municipal business tax advances: 10 Feb / 10 May / 10 Aug / 10 Nov)
ACD - calendrier fiscal · verified 24 July 2026
Loss years
losses offset future profits for the 17 most recent closed financial years, oldest first; no carryback
ACD - report de pertes en avant (carry forward) · verified 24 July 2026
Go deeper
Common questions
What is the corporate tax rate in Luxembourg in 2026?
For tax year 2025 onwards, the combined rate for a company in Luxembourg City is 23.87%: 16% corporate income tax, plus a 7% employment-fund surcharge on that tax, plus 6.75% municipal business tax.
Does every Luxembourg company pay 23.87%?
No. The municipal business tax component varies by commune, and profits up to €175,000 are taxed at the reduced 14% corporate rate instead of 16%, which lowers the combined burden for small companies.
Related in the database
Reference material from official Luxembourg sources, linked per figure. This is document automation support, not legal or tax advice; confirm figures against the linked source for your specific case.