Luxembourg budget 2027: corporate tax rate to fall to 15%

Country reference

• Country: Luxembourg (planned expansion country)
• Authorities: Ministry of Finance; Chamber of Deputies
• Topic: Draft State budget 2027 and business tax package
• Key date: Presented to the Chamber of Deputies on 7 October 2026; subject to parliamentary vote
• Law: Draft budget law 2027; Income Tax Law (L.I.R.)

Tax measures for companies

• Corporate income tax: standard rate from 16% to 15%; reduced rate for smaller companies from 14% to 13%, with its ceiling raised from EUR 200,000 to EUR 250,000, according to press reports.
• Investment tax credit: for digital and energy transition investments, from 18% to 21%.
• Losses: the 17-year limit on carrying forward tax losses would be removed, according to press reports.
• Share disposals: the holding period for the capital gains exemption would rise to 12 months, per press reports.

For individuals

• The Bëllegen Akt housing tax credit rises to EUR 45,000 per person.
• The social minimum wage rises 3.8% on 1 January 2027, with a higher related tax credit.
• The Government is preparing a reform towards a single tax class.

The numbers

• Central government spending EUR 35.8 billion and revenue EUR 33.9 billion.
• General government deficit EUR 570 million, or 0.6% of GDP, from an estimated 1.1% in 2026.
• Public debt below 30% of GDP, falling from 29.3% at end-2026 to 28.6% in 2030.
• Public investment above EUR 4.5 billion, or 4.4% of GDP.

What to do now

• Model 2027 tax charges at 15%, but wait for the final law before booking deferred tax changes.
• Review planned digital and green investments for the higher credit.
• Check share sales planned within 12 months of acquisition.

Our take

With the solidarity surcharge and Luxembourg City business tax, the combined rate should fall below 23%. The direction is clear, but several details still come from press reports; confirm them in the bill.