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Luxembourg budget law for 2021 adopted

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Schaffner Jean
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Patrick Mischo

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Julie Carbiener

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Franz Kerger

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Guilhèm Becvort

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Johanna Tschurtschenthaler

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Zofia White

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Alexandre Olympe
Olympe Alexandre

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21 December 2020

As announced in October, new tax measures are included in the Luxembourg budget law for 2021 which was adopted by the Luxembourg Parliament on 17 December 2020 (the Law). The Law will be published in the coming days.

The Law contains no material changes from the initial bill of law. The main measures are:

  • for investment funds: the introduction of a new real estate tax (prélèvement immobilier) due by certain Luxembourg investment funds holding real estate in Luxembourg and the decrease of the subscription tax due by ESG funds.
  • for individuals: the end of the tax regime applicable to stock options and warrants which is replaced by a partial exemption applicable to profit-participating bonuses paid to employees (primes participatives) and the reshape of the impatriates tax regime.

Additional amendments are made i.a. to the taxation of individuals, SPFs, the tax consolidation regime as well as registration duties on transfer of real estate.

Most of the tax measures will apply from 1 January 2021.

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