Luxembourg 2027 Budget – bill of law published

On 7 October 2026,  bill of law 8800 was submitted to Parliament to implement the government’s 2027 Budget, which focuses on purchasing power and social cohesion, whilst also seeking to support growth, competitiveness and investment, and maintain sustainable public finances.

The main corporate and individual tax measures are as follows:

• Corporate income tax rate reduction of 1% from 16% to 15% (for amounts exceeding EUR 250,000). The aggregate maximum rate of corporate income tax, municipal business tax in the City of Luxembourg (6.75%) and the contribution to the Employment Fund will reduce from the current 23.87% to 22.8%.
• Removal of 17-year limit on carry-forward of losses, for both income tax and municipal business tax.
• Extension of minimum holding period from 6 to 12 months when determining whether a capital gain realised on an asset other than real estate (including a co-investment) qualifies as a speculative gain for private wealth tax purposes and is therefore taxable. Similarly, capital gains on substantial shareholdings realised by non-residents (in the absence of an applicable tax treaty) are considered speculative and will therefore be taxable if realised within 12 months of acquisition, whereas the previous holding period threshold was 6 months.
• Increase in rates of investment tax credit from 18 % to 21% for digital transformation and the green transition, and from 6% to 9% for depreciable tangible assets.
• New accelerated depreciation scheme for rental accommodation: rate increased from 4% to 6% (with the maximum property age increased from 5 to 6 years) for properties or renovations whose reference value – fixed at the time of completion and assessed without apportionment amongst co-owners – does not exceed EUR 600,000. The 6% derogation scheme for properties acquired before 2021 is maintained, as is the current 4% rate on a transitional basis (for properties acquired between 2021 and 2025, or in 2026 where the value exceeds the threshold).
• Simplification of reporting obligations relating to profit-sharing scheme and inpatriate regime. The obligation to provide a list of the names of eligible employees has been abolished, and the information must instead be submitted electronically to the relevant tax office.
• Revised personal income tax brackets (additional 2.5 index brackets) and adjustment to tax bracket 1a.

Next steps

The bill of law will now follow the usual legislative process through Parliament. If passed, the new measures will generally apply from the 2027 tax year, except for the provisions on the accelerated depreciation scheme for rental accommodation, which will apply from the 2026 tax year.