Tax Manager | KPMG 🇱🇺 | Lecturer at Chambre des Salaries du Luxembourg | International Taxation Blog - Legal Today
Luxemburg unveiled today major tax relief for 2025. From low earners exemptions to attractive bonus for expats and measures to revive the real estate market, the Government has decided to boost further the attractivenes of the country.
Luxembourg tax relief update Luxembourg unveils a groundbreaking tax relief package set to benefit individuals and corporations significantly. Starting in 2025, individuals earning the non-qualified minimum wage will enjoy tax exemption, leading to an approximate €10.9 increase in net income per month for those in tax class 1. Additionally, individuals under 30 can now receive 75% tax-free bonuses, capped based on income, resulting in substantial tax reductions for bonuses like a €5,000 payout. On the corporate front, tax rates are set to decrease from 17% to 16% overall, with a further reduction to 14% for companies earning below €175,000 in taxable income. Municipal business taxes will continue to apply on top of these rates. Noteworthy changes include the complete exemption of interest on loans for primary residences, effective immediately, providing additional relief for homeowners. This comprehensive tax package is expected to reduce state revenues by an estimated €500 million, paving the way for a major tax reform that includes the introduction of a single tax class by 2026. Further, exciting extensions in 2025 include tax relief for beneficiaries of tax class 1A, exemption for individuals earning the non-qualified minimum wage, and more attractive tax-wise bonuses for expats. Cross-border workers from Germany working overtime will be eligible for a tax credit of up to €700, while a new exemption for bonuses for individuals under 30 is set to be introduced. The tax scale adjustments and wage indexations will further enhance the benefits for taxpayers. #TaxRelief #Luxembourg #CorporateTax #IncomeTax #TaxReform
In Estonia, the turnover tax will increase from 22% to 24% (food too) from 1 July 2025, and the change in income tax from 20% to 22% and the introduction of a 2% corporate income tax are planned for 1 January 2026.
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1. Income Tax Finland taxes residents on their worldwide income and non-residents on their Finnish-sourced income. Income is divided into two categories; a. Earned Income: This includes salaries, wages, and pensions. Taxed at progressive rates for national tax purposes starting from 12.64% and at flat rates for municipal tax purposes. The average municipality tax rate is 7%. b. Capital Income: This includes income from investments, such as dividends and rental income. It’s taxed at rates of 30% and 34% (the latter for income exceeding EUR 30,000 annually). 2. Municipal Tax Municipal tax rates vary between 4.40% and 10.80%, depending on the municipality. This tax is levied on the same taxable income as the national tax. 3. Church Tax Members of certain churches (Evangelic Lutheran, Orthodox, and Finnish German) pay a church tax ranging from 1% to 2.25% of their taxable income. 4. Public Broadcasting Tax This tax is 2.5% on annual income exceeding EUR 14,000, with a maximum amount of EUR 163. 5. Value-Added Tax (VAT) VAT in Finland is 25.5% for most goods and services, with reduced rates for certain items such as 14% on food products, and restaurants. 6. Corporate Tax The corporate tax rate in Finland is 20%. 7. Property Tax Property tax rates are relatively low compared to some other countries. First-time home buyers are exempt from paying it. 8. Special Regimes Foreign Expert Tax Regime: Foreign employees with special expertise can benefit from a flat tax rate of 32% on their Finnish salary income for up to 84 months. #taxresidency If you reside in Finland for more than six months, you are generally considered a tax resident and must pay taxes on all your income, including income from abroad. #taxationinfinland #incometax #municipalitytax #churchtax #publicbroadcastingtax #finnishvat #corporatetax #propertytax #specialregimes #taxresidency #verohallinto #bookkeepingservice #accountingservice
📢 Flash News: New Tax Measures Announced by the Luxembourg Government! The Luxembourg Government has proposed a draft law introducing several significant tax measures for both individuals and companies. These changes aim to enhance the purchasing power of residents and cross-border employees while boosting the country's competitiveness. ✨ Key Measures Include: - Adjustments to the tax scale and more advantageous tax calculation formula for taxpayers benefiting from tax class 1A - Revamp of the Impatriate tax regime - Revised ceilings for the profit sharing scheme - Increased tax credits For a detailed overview, please read our Flash News here: https://lnkd.in/eGd7YYVz #TaxUpdates #Luxembourg #TaxMeasures #StayInformed #PwCLuxembourg
Because for the last 3 election cycles in a row Labour chose to voluntarily take a Capital Gains Tax (CGT) off their platform, even going so far as pledging not to introduce one. Why? To win votes from the centre right. Now that those votes are well and truly lost possibly Labour could rethink this. A CGT is a theory or a principle. The implementation of one is complex and difficult. My own recommendation is to stick with simple taxes on housing such as the Stamp Duty on property sales in Australia and The UK. Further taxing wealth in financial or other assets is difficult and has more unintended side effects. So potentially just raising the top tax rate by 5-10% could capture some of that.
"Tax reform is frequently discussed in New Zealand – particularly by the political left – but it is rarely implemented ... Attempts to make the tax system more progressive, to ameliorate economic inequality, never seem to get beyond the initial debates. This means that we have a tax system that is much more rightwing and rich-friendly than in most countries..." Read more from Bryce Edwards via #DemocracyProject https://lnkd.in/gWg6b_bS
The Chancellor of the Exchequer, Rachel Reeves, published a number of policy papers yesterday as the new government’s first budget on 30 October 2024 was revealed. Among the policy papers were notable non-dom tax changes that will be coming into effect next year. While some aspects from the previous government’s proposals have been adopted by the current Labour government, Joseph Adunse, a Partner in our private client tax team, summarises the current position and the key changes in our Insight below. #Labour #NonDomTax
Where does New Zealand's tax system rank globally? Third place overall—but this impressive position tells only part of the story. While our GST system is one of the world's best, our approach to taxing businesses ranks just 30th out of 38 countries. The Tax Foundation's Index is more about the structure of taxation rather than the tax take. Estonia, having held top spot for a decade, collects almost as much revenue for its government as New Zealand's, relative to the size of its economy, but more efficiently. Our GST system is exceptional—only Korea's consumption tax outranks ours, but not because it is better designed. New Zealand's is the tidiest, and that helps us rely less on other worse taxes. Yet our corporate tax system faces significant challenges. When companies cannot fully count the real cost of investments in plant, machinery, and buildings against their earnings, their effective tax rate winds up being higher than the official rate—which is already high to begin with. The abolition of capital allowances for commercial buildings, combined with council rating systems that penalise adding buildings to land, means companies have less incentive to invest here. We all have different views about how large a role government should play in the overall economy and in redistribution. Whatever your preferred level of taxation, it is better that government raise needed funds in the least harmful way possible.
📍On 17 July 2024, the Luxembourg government submitted a draft Law (n°8414, hereafter “the draft Law”) to Parliament, introducing several tax measures for individual taxpayers and companies, including a reduction of the corporate income tax rate from 17 to 16% as from fiscal year 2025. 📈 📍The aim of these measures is to strengthen the purchasing power of Luxembourg residents and cross-border employees, as well as the competitiveness of Luxembourg. 🇱🇺 More details here: https://lnkd.in/gKCS57tP
"Portugal would do better to attract talent and improve earnings incentives by setting a ceiling for social contributions and reducing income tax rates more broadly, instead of granting special tax credits or returnee tax-relief. Closing the value-added tax (VAT) gap and eliminating special tax credits would allow room to either reduce the tax burden on labor or pursue alternative reforms that would increase labor productivity and real wages." #portugal #PIT #IRS #taxfoundation
We now have some information from the Chancellor of the Exchequer, Rachel Reeves, on how Labour intends to implement changes to the non-dom tax rules. These remove some of the reliefs proposed by the previous government. Read more about this in our Insight. It has also been announced that the Budget will be held on 30 October 2024, when more details will be announced. #NonDomTax
The Chancellor of the Exchequer, Rachel Reeves, published a number of policy papers yesterday as the new government’s first budget on 30 October 2024 was revealed. Among the policy papers were notable non-dom tax changes that will be coming into effect next year. While some aspects from the previous government’s proposals have been adopted by the current Labour government, Joseph Adunse, a Partner in our private client tax team, summarises the current position and the key changes in our Insight below. #Labour #NonDomTax
