Luxembourg tax measures relieving companies and self-employed individuals impact

Relief from advance tax payments and deferral of tax payments

Companies and self-employed individuals facing liquidity difficulties due to the Covid-19 crisis will be able to request the cancellation of their advance tax payments of income tax and municipal business tax regarding the two first trimesters of 2020. This regime will however not apply to advance tax payments in relation to net wealth tax.

In addition, companies and self-employed individuals will be able to request a four-month deferral to pay their taxes due as from 1 March 2020. The Government has confirmed that this deferral of tax payments will not trigger the accrual of late interest penalties.

Taxpayers must introduce a request to benefit from the aforementioned measures using a specific form made available on the website of the tax administration. The Government has announced that the Luxembourg tax authorities will automatically accept these requests.

Extension of tax return filing deadline

The deadline to file the 2019 tax returns has been extended until June 30, 2020, both for companies and for individual taxpayers.

VAT measures

The Luxembourg tax authorities have committed to refund positive VAT balances under EUR 10,000 as from this week, which should improve the cash position of approximately 20,000 companies established in Luxembourg.