3 Minutes On Essential Terms (Video)

Luxembourg has introduced a draft law establishing a new tax regime for stock option plans granted by qualifying innovative companies. The proposed framework defers taxation until employees sell their shares, with gains taxed at a reduced rate, while eliminating valuation complexities and tax liabilities before liquidity events. The regime targets young innovative companies meeting specific criteria, with implementation planned for tax year 2027.

Luxembourg employers face a critical compliance deadline as administrative sanctions for failing to implement the right to disconnect framework come into force on 4 July 2026.

The EU Pay Transparency Directive aims to operationalize equal pay through transparency duties and stronger enforcement mechanisms, with a transposition deadline of 7 June 2026. While most Member States remain in drafting phases and Luxembourg has yet to publish draft legislation, employers should begin preparing now by reviewing compensation structures, establishing objective pay criteria, and ensuring their systems can support future reporting obligations.

Luxembourg's National Institute of Statistics and Economic Studies has confirmed a 2.3% annual inflation rate for May 2026, triggering mandatory wage indexation under the country's Labour Code. This public order provision requires all employers to implement a 2.5% increase across salaries, wages, and pensions starting June 1, 2026, with significant financial penalties for non-compliance.

Luxembourg's Labour Code mandates that companies establish schemes ensuring employees can disconnect from digital devices outside working hours. With administrative fines of up to EUR 25,000 looming after the June 2026 deadline, employers must implement practical arrangements, awareness campaigns, and compensation measures for exceptional derogations.

On 19 January 2026, the demissionary Minister of Social Affairs and Employment submitted an amended version of the legislative proposal implementing the EU Pay Transparency Directive for advice to the Council of State.

A reform of the Luxembourg pensions regime came into force on 1 January 2026, introducing a range of measures designed to make the regime sustainable and offer more flexibility to insured individuals.

The draft bill No. 8634 to amend Luxembourg's pension regime was adopted by the Chambre des Députés on December 18, 2025.

New EU rules on European Works Councils come into force on 31 December 2025.

Luxembourg's employment law is constantly evolving in response to both national initiatives and European Union legislation.

The VAT treatment of transfer pricing (TP) adjustments continues to present difficult challenges, as discussed in our previous newsflash...

On 22 January 2026, the Luxembourg Parliament voted through bill of law 8590 introducing a new tax regime for carried interest.

As we close out 2025 and step into 2026, EU sustainability regulation is entering a new phase marked by structural reform, simplification and long-awaited clarity. In our latest Eyes on ESG video...

Are deals and exits really slowing or becoming more selective and creative?

Luxembourg has just introduced a new tax credit for investments in start-ups to encourage innovation and entrepreneurship. The incentive applies as from the 2026 tax year and aims to support early-stage companies...

On 6 January 2026, the Luxembourg government moved forward with its long-awaited reform of personal income taxation via bill of law 8676...

A reform of the Luxembourg pensions regime came into force on 1 January 2026, introducing a range of measures designed to make the regime sustainable and offer more flexibility to insured individuals.

Money laundering now applies to all predicate offences. This then raises the question: what are the implications of this change to Luxembourg's Criminal Code?

On 17 December 2025, bill of law 8519 implementing Directive (EU) 2022/2381 on gender balance among directors of listed companies was voted through by the Luxembourg Parliament...

The CSSF's new circular and technical document, applicable from 19 December 2025, update the regulatory framework and provide insight into the CSSF's interpretation of key fund concepts.