Luxembourg subscription tax in 2025
This article will introduce the main purpose of the subscription tax in Luxembourg and provide an in-depth analysis of Luxembourg's subscription tax as of 2025. This includes recent reforms that change tax rates and simplify the process of filing a tax return. How do investment funds pay taxes in Luxembourg? What is subscription tax, at what rate is it calculated, and who must pay it?
The subscription tax in Luxembourg has recently changed, in this article we will explain the main purpose of the subscription tax in Luxembourg and include recent reforms about changed tax rates and a simplified process of filing a tax return.
What is subscription tax in Luxembourg
Luxembourg's tax system is quite complex, but it is considered one of the most favorable in Europe. This applies not only to personal taxation, but also to such a complex segment of the economy as investment funds.
Luxembourg uses a subscription tax as a registration tax with a fixed rate, levied on circulating securities issued by certain types of investment funds. It must be declared and paid every quarter.
What does subscription tax apply to? Several investment funds can be used with subscription tax.
This investment fund can invest in all types of assets and sell its units to all types of investors throughout the EU. Such funds allow investors to invest in securities that one investor could not access, diversify investment risks, and generate a common return.
- Standard rate: 0.05% of net assets;
- Reduced rate: 0.01% of net assets for money-market funds, cash funds, or share-classes of UCIs reserved to one or more institutional investors;
- Exemptions: for special institutional money market funds, pension funds, exchange traded funds, microfinance funds, and funds investing in other funds already subject to the subscription tax.
A collective investment structure for qualified investors. With the help of such funds, you can invest in alternative assets, such as real estate or private equity. The minimum investment amount is not less than 100,000 euros.
- Standard rate: 0.01% of net assets (if the fund does not invest in a portfolio of risk capital); Reduced rate: none;
- Exemptions for certain money market, microfinance funds and pension funds or RAIFs investing in other funds already subject to subscription tax
If the RAIF invests in a portfolio of risk capital then there will be no subscription tax.
An investment fund that can invest in alternative assets, such as futures, derivatives, collectibles. Investments in SIFs are available only to “well-informed” investors who can adequately assess the risks associated with investing in such an instrument and document this. The minimum amount to invest is not less than 100,000 euros.
- Standard rate: 0.01% of net assets.
- Reduced rate: none
- Exemptions: for money-market funds, cash funds or share-classes of UCIs reserved to one or more institutional investors.
Investment companies that are created only for the management of personal assets of individuals.
- Standard rate: 0.25% of net assets, the amount of tax cannot be less than 100 euros or more than 125,000 euros a year.
Since the Subscription tax is a quarterly tax, to find out the amount to be paid, you need to multiply the rate by the tax base, and then divide by 4.
Comparison with other European countries
Luxembourg and Belgium are the only European countries that use a subscription tax regarding investment funds. All other European countries have the taxation of funds incorporated in Wealth and/or Capital gains taxes. It is really advised to contact a financial specialist to find out all relevant information regarding an investor’s personal situation.
| Country | Tax rate | Applicable entities |
| Luxembourg | 0.05% | UCIs, SIFs, RAIFs |
| Belgium | 0.01% | RAIFs |
| Germany | 0% | All entities |
| France | 0% | All entities |
| Spain | 0% | All entities |
| Italy | 0% | All entities |
| The Netherlands | 0% | All entities |
Recent reforms and updates on subscription tax in 2025
On 21 July 2023, Luxembourg adopted a law that amended the laws on subscription tax levied on certain funds. At the same time, the Grand-Ducal regulation was adopted, which repealed two outdated provisions on the conditions and criteria for subscription tax for UCIs and SIFs. This law brought the subscription tax regime in line with Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds.
Key tax changes in the subscription tax
ELTIFs
PEPPs
MMFs
The law entered into force on 29 July 2023.
How to file and comply with subscription tax requirements in Luxembourg
The completion of the subscription tax return has also undergone some changes. The aim of the innovations is to simplify the preparation and verification of the return. In addition, the taxpayer can receive more explanations and recommendations in the new version. The return can be completed online on the MyGuichet.lu platform. Returns are no longer accepted in paper form.
The following changes and additions to the new law to make it easier to fill in and sent the declaration to the tax office:
- Guidance for declarants;
- Automatic currency conversion in any currency other than the euro at the rate of the European Central Bank;
- Possibility of notifying the filing of a provisional declaration reserved for AIFs for which the net asset value is not yet available;
- Change in the declaration format for CSSF identification numbers of legal entities and sub-funds;
- Addition of a page with a summary of the data after filling out the declaration.
There will be a 2 year overlap between the old and the new format. To use the new format, additional data will be required. The additional data consists of the following fields, when using the new format, these are mandatory.
- CSSF number of the legal entity of the UCI/SIF/RAIF;
- CSSF number of the sub-funds according to the different declaration schemes;
- For the ‘fund of funds’ scheme, the original fund or sub-fund and the target fund or sub-fund are identified by the company name and the CSSF number;
- Identification of the declarant (legal person) by company name and national identification number (matricule). This is the legal entity responsible for submitting subscription tax declarations.
Remember about the transition period: the old and new systems will co-exist until August 2026.
Understanding the tax system on your own can be quite difficult. The Luxembourg government provides tax advice to its citizens, but it is still advisable to seek help from specialists, as the penalties for non-payment can be quite serious.
Frequently Asked Questions (FAQ)
What is the subscription tax and who has to pay it in Luxembourg?
What is the base rate of the subscription tax?
What has the law of 21 July 2023 changed?
Source: guichet.public.lu, assets.kpmg.com, www.bsp.lu, guichet.public.lu
We took photos from these sources: Behnam Norouzi on Unsplash
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