Here’s a concise overview of the key points:

• Corporate income tax (CIT) reduction: Starting from 2025, the CIT rate will decrease by 1 per cent. Therefore, the companies with taxable profits below €175,000 will see a reduction from 15 per cent to 14 per cent, and those with profits exceeding €200,000 will see a decrease from 17 per cent to 16 per cent. This aligns Luxembourg’s CIT near to the OECD and EU averages.

• ETF tax exemption: The Draft Law extends the existing subscription tax exemption for passively managed ETFs to include actively managed ETFs.
• SPF - Several changes include:
  • The corporate designation must contain “société de gestion de patrimoine familial” or “SPF”.
  • The minimum annual subscription tax increases from €100 to €1,000.
  • Compliance certificates must be filed electronically.

New fines and procedural clarifications will be imposed for breaches of SPF regulations, with fines ranging up to €250,000 and additional penalties for continued non-compliance.

• Inpatriate regime overhaul: From financial year 2025, the current exemptions will be replaced with a 50 per cent exemption on gross annual salaries up to €400,000 for highly skilled foreign workers.
• Youth employment bonus: below certain threshold, a new 75 per cent exemption on bonuses for employees under 30 entering their first permanent job will be introduced, applicable for five years.
• Enhanced profit-sharing bonuses: The participative bonus regime will now allow bonuses to represent up to 30 per cent of an employee’s annual gross salary and 7.5 per cent of the previous year's profit.
• Tax credit for cross-border workers: Up to €700 tax credit will be introduced for overtime remuneration of cross-border workers subject to double taxation.
• Inflation adjustment: The tax scale will be adjusted to inflation.

Starting in fiscal year 2025, targeted measures to ease the tax burden for lower-income taxpayers include revising the tax scale for Class 1a, which covers single-parent households, widowed persons, and those over 64, increasing the tax-exempt tranche to €26,460. The single-parent tax credit will rise to €3,504 annually, the allowance for children living outside the household will increase to €5,424, and the minimum social wage tax credit will be raised to €81 monthly, ensuring non-qualified minimum wage earners are not taxed regardless of their tax class.

The draft law No. 8414 (in French) can be accessed here.