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The new tax measures for Luxembourg Companies in 2013
Budget tax package 2013 approved
I. Introduction
These new tax measures are the result of the approval of the Luxembourg budget tax package for 2013 by the Luxembourg Parliament on December 13th, 2012.
Only the measures in relation with the Luxembourg Companies will be taken into consideration by the present newsletter.
II. Increasing of the contribution to the Employment Fund
The contribution to the Employment Fund, also referred as Solidarity Surtax, will be increased of 2% and set at 7% (formerly 5%).
Accordingly the aggregate 2013 income tax applicable to the Luxembourg companies will be increased from 28,80% to 29,22% (for Luxembourg-city).
III. Minimum CIT rise and extension of its scope
· For Soparfis in other words only the unregulated companies for which the sum of the financial assets, securities, cash at bank exceeds 90% of their total balance sheet, the minimum CIT Corporate Income Tax) will be increased from € 1500 by year to € 3.210 by year (7% contribution to the Employment Fund included).
· For the other companies,a minimum flat CIT will be due depending on their total balance sheet as follows :
Total balance sheet
Minimum flat CIT IRC (including the 7% of Employment Funds)
Up to € 350.000
€ 535
From € 350.001 to € 2.000.000
€ 1.605
From € 2.000.001 to € 10.000.000
€ 5.350
From € 10.000.001 to € 15.000.000
€ 10.700
From € 15.000.001 to € 20.000.000
€ 16.050
Above € 20.000.000
€ 21.400
This minimum flat CIT cannot be reduced and will be considered as a conditional advance tax payment on CIT due in the future tax years. In the fiscal unity regime, the parent company of the fiscal unity will bear the total amount of the minimum flat CIT due by each entity of the consolidated group. This total amount due by the consolidated group is capped at € 21.400.-.
Finally the tax credits will not reduce its minimum flat CIT.
IV. Net worth tax reduction
Luxembourg resident companies may liable to the annual the Net Worth Tax of 0,5% may, under conditions, reduce this tax for a year, by recording and keeping in their balance sheet a Net Worth Tax reserve amounting to 5 times the reduction amount of the Net Worth Tax requested. This reduction is limited to the amount of CIT due for the same year.
The budget tax package 2013 introduces a new restriction. Indeed, the Net Worth Tax reduction will be limited to the amount of CIT (Employment Funds included) due in excess of the minimum flat CIT due for the year under consideration.
The information and comments expressed in this document in no way constitute any fiscal opinion binding on Centuria Capital Luxembourg S.A.
Therefore, this document is not a contractual document.