Fiscal considerations
Luxembourg tax administration and filing procedures are kept simple and straightforward - the third most straightforward and uncomplicated system in the EU (World Bank IFC “Doing Business” Project 2009).
The Grand Duchy of Luxembourg is among the EU Member States with the lowest public debt and the lowest budget deficit. These sound economic fundamentals allow the Government to maintain a competitive level of taxation for both individuals and companies employer’s social charges are low, so that despite above-average salaries, total employment costs are well below those of neighbouring countries. At the same time, the excellent public health care and insurance system allows most Luxembourg employees not to seek additional private health insurance.
Luxembourg has the lowest average number of taxes borne and the second lowest average number of taxes collected.
Luxembourg VAT (value-added tax, a form of consumption tax in Europe) rates are the lowest in Europe, with a standard rate of 15%. For B2C transactions, companies operating their business out of Luxembourg can benefit from this very competitive VAT rate for all electronic services supplied to any EU consumer.
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