Luxembourg Company Formation

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Company Formation and Related Services



Buying a European shelf company with VAT number

Whenever you need to start doing business immediately in a European country and you need a company with a VAT number, you don’t have to wait for the bureaucratic procedures.

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Partner Law Firms

We encourage you to contact our partner law firms in Bucharest: Rolegal and E&C, both part of our legal network.

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Tax Minimization Structures

BridgeWest is specialized in special corporate structures designed for tax minimization. No matter where you want to incorporate your company, you will need to consider how you can legally minimize costs.

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Paying Taxes in Luxembourg

August 17, 2011, 4:03 pm

1. What is the corporate tax in Luxembourg?

In Luxembourg, the corporate tax rate varies according to the income and a 5% increase is applied as an unemployment fund contribution. Therefore, a company with an income below 15,000 EUR is subject for 21% corporate tax, while a company with an income that exceeds 15,000 EUR has to pay a 22, 05% corporate tax. Usually, the Municipal Business Tax of 6,75% is also added to the income tax rate.



2. What is the VAT in Luxembourg?

In Luxembourg, the standard VAT rate is 15%, but there are some exceptions.  A company with activity in management and safekeeping of securities is subject to a 12% VAT rate. For gas and electricity there is a 6% VAT rate and only 3% applies for food products, books, newspapers, hotels and radio and TV broadcasting services.



3. How can the VAT be refunded in Luxembourg?

A company member of EU must follow the regulations of the directive 2008/9/EC, which stipulates that the VAT refunds are made through the portal of the competent authority in your Member State of establishment. Here the applicant must deposit an application stating the name and full address, an email address, the business activity for which the goods and services are bought, a declaration that no goods or services were delivered to Luxembourg, bank account details and the VAT number and tax reference number.

The non EU residents’ claims must cover one year and cannot have a value lower than 250 EUR. The application, signed by the company’s representative must be deposited at the “Administration de l’Enregistrement et des Domaines” followed by the VAT certificate from the state where the company is located, the original invoices, the import documents, a declaration that the applicant haven’t carried out taxable supplied in Luxembourg, a declaration that any amount that is in addition will be reimbursed to the Luxembourg VAT authorities.

The decision is taken in maximum half of year and if the claim is approved, the company receives the refund in its accounts in maximum 10 days.


4. What is the dividend tax in Luxembourg?

The dividend tax rate is 15% of gross dividends paid to nonresidents in Luxembourg.



5. What are the taxes rates applied on other payments?

There are no withholding taxes on interests, royalties or technical service fees paid to nonresidents required. Also there is no branch remittance tax.



6. Are there any incentives for foreign investors in Luxembourg?

Luxembourg offers many incentives for foreign investors, consisting of credit assistance or tax rebates. Some actions, such as programs to encourage foreign investment, in addition to investment tax credits, venture capital investment certificates, regional and national incentives and environmental incentives are also implemented by the Government. The lack of withholding taxes on interests or royalties paid to nonresidents is attracting the foreign investors as well. Luxembourg has also a vast network of double tax treaties which is granting special incentives to the foreign investors coming from the partner countries, such as exemptions from paying the withholding tax on dividends or the corporate tax or the minimization of those.



7. Why do I need a local accountant for my business in Luxembourg?

For a company that is set up in Luxembourg, a local accountant will have easier access to local market knowledge and will be able to guide the company on a free-of-risks path. 

BridgeWest offers company formation in Luxembourg, including virtual office and other related services. For more information, please feel free to visit our website for legal services in Luxembourg.

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Company Formation in Luxembourg


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