On 17 April 2018, the Luxembourg Law containing the new
intellectual property ("IP") tax regime
was enacted. This law introduces a new Article 50ter in the Income
Tax Law which will be applicable as from fiscal year 2018.
Since 2008, Luxembourg has offered a tax incentive providing for
an 80% exemption from corporate income tax and municipal business
tax on eligible income and capital gains derived from certain IP
rights (the so-called IP Box regime). In addition, from 1 January
2009, a 100% exemption from net wealth tax was applied to
qualifying IP rights.
Following the consensus reached in February 2015 by all OECD and
G20 countries on the application of the modified nexus approach for
IP regimes, Luxembourg decided to abolish its IP Box regime as of 1
July 2016 (with a grandfathering period of five years).
