Luxembourg: Constitutionality of different treatment under minimum net wealth tax for holding companies
A decision of the Constitutional Court is expected either late 2023 or early 2024.
A decision of the Constitutional Court is expected either late 2023 or early 2024.
The Lower Administrative Court referred to the Constitutional Court (Tribunal administrative n° 45910) the issue of the constitutionality of the different treatment under the minimum net wealth tax for holding companies.
Background
Companies in Luxembourg are subject to a minimum net wealth tax depending on their balance sheet size, resulting in a tax liability ranging from €535 to €32,000. However, companies with a total balance sheet exceeding €350,000 are subject to a minimum flat tax of €4,815 provided they hold over 90% of their total assets in predominantly financial assets, transferable securities, and specific receivables.
A holding company subject to the flat rate of €4,815 challenged the constitutionality of its different treatment under the minimum net wealth tax (i.e., it would have been subject to tax of €1,605 under the normal rule). The Lower Administrative Court found no justification for the different treatment and decided to refer the issue to the Constitutional Court for final determination. A decision of the Constitutional Court is expected either late 2023 or early 2024.
Read an October 2023 report prepared by the KPMG member firm in Luxembourg
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