Luxembourg's Minimum Net Wealth Tax Regime Found Partially Unconstitutional

On 10 November, the Luxembourg constitutional court found that some elements of the flat minimum net wealth tax (NWT) of EUR 4,815 for holding and financing companies was unconstitutional in cases where it exceeded the minimum NWT that would have been payable under the progressive scale.

Awaiting a legislative change, taxpayers whose total balance sheets sit between EUR 350,000 and 2,000,000 may benefit from a lower minimum NWT of EUR 1,605 rather than the EUR 4,815 otherwise applicable. This applies to NWT assessments that have not yet been issued or can still be challenged.

Background on Luxembourg minimum NWT

Luxembourg resident companies are subject to NWT, levied annually at a rate of 0.5% on their net asset value, with any portion of such wealth exceeding EUR 500,000,000 being subject to a rate of 0.05%.