On 19 December 2023, the Luxembourg Parliament adopted the law introducing a major reform of the investment tax credit framework, applicable with effect as from tax year 2024. The law not only implements the investment tax credit modifications agreed upon in the tripartite agreement of 28 September 2022, but also completely reforms the current regime.
First, it increases the rates of the global investment tax credit. Further, it replaces the current additional investment tax credit by an additional tax credit for investments and operating expenses linked to the digital transformation and the ecological and energy transition and introduces a new system to certify the nature and reality of such investments and operating expenses.
Our Tax Partner, Hugues Henaff, provides hereafter an overview of the key aspects of the new framework introduced.