Investment and Capital Income – Luxembourg

Dividends from Luxembourg companies subject to 15% withholding tax plus 6% solidarity surcharge, total 21%. Applies to residents and non-residents unless treaty reduced.

If shareholding exceeds 10% or acquisition cost over €1.2 million, and held 12+ months: 50% of dividends exempt from taxation. Significant tax advantage for substantial shareholders.

Parent-subsidiary directive eliminates withholding for EU parent companies holding 10%+ for 12+ months. Major advantage for corporate structures.

Main residence: exempt if lived 2+ years. Investment property: taxed at progressive rates if sold within 2 years. After 2 years: exempt from tax.

Private investors: gains tax-free unless shareholding exceeds 10% at any point in 5 years before sale. Then taxed at 50% of progressive rates.

Crypto held over 6 months: completely tax-free. Under 6 months: taxed as miscellaneous income at progressive rates up to 42%. Major advantage for long-term holders.

Interest from savings accounts taxed at progressive income tax rates. No withholding tax. Must be reported in annual tax return if filing required.

Interest and dividend income up to €1,500/year exempt from taxation for single persons, €3,000 for married couples. Applies to aggregate investment income.