Luxembourg Wealth Tax Guide 2026

Luxembourg imposes a net wealth tax (NWT, Impôt sur la Fortune — IFI) on corporate entities only. Individuals are not subject to any wealth tax. The NWT rate is 0.5% on net assets exceeding EUR 500 million, with a EUR 500,000 exemption threshold. A minimum NWT of EUR 1,500 to EUR 30,000 applies depending on total assets. Participation shares (≥10% or EUR 1.2 million) are exempt from NWT.

Overview — Net Wealth Tax in Luxembourg

Luxembourg's net wealth tax (Impôt sur la Fortune, IFI) is an annual tax on the net assets of corporate entities. Individuals are not subject to wealth tax in Luxembourg — there is no annual tax on personal net worth, bank deposits, investment portfolios, or personal real estate holdings. The NWT applies to companies (including SOPARFIs, holding companies, and investment fund vehicles structured as corporate entities) and is administered by the Administration des contributions directes (ACD).

NWT Rate — 0.5% on Assets >EUR 500M

The NWT is calculated as follows:

Rate: 0.5% on net assets exceeding EUR 500 million
Exemption threshold: The first EUR 500,000 of net assets are exempt from NWT
Assessment base: Net assets are calculated as total assets minus liabilities, valued at fair market value (for most assets)
Filing: NWT is declared annually as part of the corporate tax return (CIT return)

Minimum NWT — EUR 1,500 to EUR 30,000

All corporate entities must pay a minimum NWT regardless of profitability or asset value:

Total assets ≤ EUR 350,000: Minimum NWT of EUR 1,500
Total assets EUR 350,001 to EUR 2,000,000: Minimum NWT of EUR 4,500
Total assets EUR 2,000,001 to EUR 10,000,000: Minimum NWT of EUR 8,250
Total assets EUR 10,000,001 to EUR 50,000,000: Minimum NWT of EUR 15,000
Total assets over EUR 50,000,000: Minimum NWT of EUR 30,000

The minimum NWT is calculated based on the total assets (sum of assets) shown on the balance sheet, regardless of whether the company is profitable.

Participation Exemption for NWT

Qualifying participation shares are exempt from NWT:

Qualifying conditions: ≥10% equity holding (or acquisition cost ≥ EUR 1.2 million)
Exemption: The fair market value of qualifying participations is deducted from the NWT assessment base
Impact: This significantly reduces the NWT burden for holding companies (SOPARFIs) that hold qualifying participations as their primary assets
Documentation: The company must maintain evidence of qualifying status and valuation of participations

No Wealth Tax for Individuals

Luxembourg does not impose any wealth tax on individuals. Key points:

No annual net worth tax on personal assets
No annual tax on real estate holdings beyond the low-rate impôt foncier
No tax on bank deposits, investment portfolios, or life insurance policies
No luxury tax on cars, yachts, jewellery, or other high-value personal assets
No solidarity tax on wealth (ISF-style tax found in some EU countries)

NWT Planning Considerations

For corporate entities, the following NWT planning strategies are common:

Participation exemption: Structure holdings to qualify for the NWT participation exemption (≥10% or EUR 1.2 million)
Debt financing: Use debt rather than equity to reduce net assets (thin capitalisation rules apply)
Asset valuation: Ensure assets are valued at fair market value (not inflated values)
Group structuring: Consolidate group structures to minimise duplication of NWT

FAQs

Is there a wealth tax for individuals in Luxembourg?

No, Luxembourg does not impose any wealth tax on individuals. There is no annual tax on personal net worth, real estate (beyond the low impôt foncier), or investment portfolios. This makes Luxembourg an attractive jurisdiction for high-net-worth individuals.

What is the minimum NWT for a newly incorporated SOPARFI?

A newly incorporated SOPARFI with total assets not exceeding EUR 350,000 pays a minimum NWT of EUR 1,500 per year. This applies even if the company has no profits and holds only start-up capital.

Can the NWT be offset against CIT?

No, the NWT is a separate tax and cannot be credited against corporate income tax. However, the NWT is deductible for CIT purposes as a business expense, reducing the effective CIT burden.

Disclaimer

This guide provides general information about Luxembourg net wealth tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Luxembourg tax advisor (conseil fiscal) or the ACD directly for advice specific to your situation. InvestmentKit does not provide tax advice.