LAW AND PRACTICE
1. TAX
1.1 Tax Regimes
Luxembourg's tax system is comprehensive and primarily based
on the principles of residence and source taxation. The main tax
regimes relevant to individual clients, estates, trusts, and
foundations are as follows.
Personal Income Taxes
Individuals who have their domicile or usual abode in Luxembourg
will be considered tax resident and will be subject to personal
income tax (PIT) on their worldwide income subject to the
application of any relevant double tax treaty (DTT) signed by
Luxembourg.
A person's domicile is the location where they maintain a
residence under conditions suggesting they intend to keep and use
it. An individual is considered to have a habitual place of
residence in Luxembourg if they have continuously stayed in the
country for at least six months. This six-month period may span two
different tax years, and brief absences are not taken into
account.
