On 7 October 2026, the Luxembourg Government submitted to Parliament a draft budget for 2027 and its 2026–2030 multi-year financial plan.
The draft budget for 2027 continues the implementation of tax measures announced in the government’s 2023-2028 coalition agreement.
The proposed changes are expected to affect individuals and corporate taxpayers, particularly with regard to capital gains, employers’ reporting obligations, real estate investments, and investments in digital transformation and the ecological and energy transition.
In this ATOZ Alert, our Tax Partner, Fanny Bueb, and our Chief Knowledge Officer, Marie Bentley, highlight and explain the Draft Budget’s following tax measures affecting businesses:
- a 1% cut in the corporate income tax rate;
- the removal of the time limit on tax loss carryforwards;
- higher investment tax credit rates for digital and green projects;
- an extension of the holding period for speculative gains;
- new rules for amortising and deducting residential investments; and
- streamlined employer reporting for the impatriate and employee profit-sharing regimes.
Most measures are expected to apply from tax year 2027.