Tax Reduction for 5,000 Companies Means Revenue Loss for Government

Luxembourg - November 29, 2023

Contrary to the flashy self-promotion that dominates social media these days, Luxembourg stands as a tax haven for corporations and investors. With a recent constitutional court ruling in Luxembourg and its subsequent approval in the financial commission, 5,000 companies will now pay less tax compared to before, potentially causing a significant dent in the new government's budget.
This pertains specifically to financial companies with balance sheets ranging from 350,000 to 2 million euros. Previously, there existed a discrepancy in wealth taxation between financial entities and other businesses, such as artisanal industries. Financial companies were subject to higher wealth taxes. "Some were paying 4,815 euros annually, while others paid 1,605 euros."
Following the constitutional court ruling, financial companies now only pay the minimum tax of 1,605 euros per year.
What will this cost the government? How much revenue will be lost due to this decision? This means that the taxation of these companies will now be regularized: "So, the taxes that were pending will be adjusted. The taxes that come due, which are the prepayments made by these companies, will now be considered by the tax authorities. They will pay the minimum rate in the future."
Around 5,000 companies are affected by this ruling, set to pay 3,210 euros less in taxes. Consequently, this translates to a loss of 16 million euros annually for the government.