How to do company accounting in Luxembourg

What is corporate accounting in Luxembourg

Imagine a small retailer in Esch-sur-Alzette, buried under a pile of receipts and half-finished spreadsheets as the deadline for filing taxes approaches. Stress is building, time is running out, and the pressure is on, because a single late filing can result in fines starting at €250 and escalating quickly. That's where business accounting comes in. It's all about tracking your income, expenses, and debts to keep your business on track and your record clean enough to qualify for incentives and support from the government.

Bookkeeping in Luxembourg is your lifeline. With progressive taxes schemes, for profits over €200,000 errors will cost you, as fines can soar into thousands at higher revenue. The local Chamber of Commerce warns against solo steering too, especially for first-time entrepreneurs.

A visual dashboard, or at least a general financial estimate of taxes owed, is useful for setting the right expectations: how much tax the government expects the company to pay, and how much money can be returned to the company budget through the tax return process.

Small businesses with a turnover under €100,000 can opt for simplified accounting, while bigger players need more complex systems and can face external audits to check if these systems work properly. But why does this matter? Because Luxembourg’s status as a financial hub of Europe — hosting over 140 banks — means regulators don’t mess around when it comes to financial clarity.

Infographic from Practical Guide – Navigating business challenges by Chamber of Commerce Luxembourg. The full guide is available for download on the organization's website.

Remember, that bankruptcy in Luxembourg may result in you no longer being allowed to open a business in the country if you lose professional integrity. The second chance is available in case of non-fraudulent bankruptcy, where the failure is clearly due to external circumstances rather than mismanagement or negligence.

Key takeaways for business accounting in Luxembourg

Here’s what you need to know about the main principles, timelines, and numbers — straight from Luxembourg’s tax playbook.

Principles of taxation

Every business — sole traders, partnerships, or companies — must file tax returns based on actual income and expenses, calculated annually. Corporate accounting in Luxembourg follows a calendar year (January 1 to December 31), though firms can request a different fiscal year if needed. Taxes are prepaid in quarterly installments, adjusted later against your final bill. Think of it like paying ahead to avoid a year-end shock.

Tax obligations timeline

Your corporate income tax return is due by May 31 of the following year. For instance, 2024’s tax reporting for companies in Luxembourg lands by May 31, 2025. Miss it, and you’re looking at a €250 fine, with a 10% penalty if you owe tax. The value added tax or VAT returns deadlines may vary: monthly by the 15th if turnover exceeds €620,000, quarterly otherwise. Quarterly tax prepayments are due on March 10, June 10, September 10, and December 10 — each 25% of the previous year’s tax.

Numbers to think about

Corporate tax in the Grand Duchy sits at 17% for profits over €200,000, while smaller firms with profits under €175,000, pay 15%. Over 3,500 companies face annual audits in Luxembourg — their turnover tops €12.5 million or they employ 50+ staff. Are you one of those companies?

Online tax reporting for companies in Luxembourg

Digitalisation is starting to make business accounting easier. Since 2022, individual taxpayers in Luxembourg have had the option to file tax returns online. Now, businesses are catching up. All corporate income tax, municipal business tax, and net wealth tax returns will now be filed online via MyGuichet.lu. It’s part of a larger push to modernise the tax system — faster processing, fewer errors, and better transparency.

But governmental digital tools only work if your numbers are already in good shape. That’s why more businesses are switching to online accounting platforms, not just to stay compliant, but to save time and gain a clearer picture of their financial health. Moving away from paper or Excel sheets makes everything more efficient. It’s easier to spot trends, prepare for audits, and respond to new regulations when your finances are well-structured from the start.

Several platforms are now available on the market, but EasyBiz accounting platform stands out as a flexible solution tailored to small and medium-sized businesses, customized to the field of activity. It’s not the only option, but it’s one of the most user-friendly and adaptable systems out there. The idea is simple: if your accounting works well, it’s much easier to stay in control when the rules change or deadlines tighten. Even better, if you can do it fully online with support in chat

EasyBiz interface screenshot

For those who prefer not to manage everything alone, working with a remote professional accounting team in Luxembourg is one of the smartest moves. Experts can help you shift your business taxation to digital tools, keep your books in order, and make sure your filings are correct. So you can focus on running the business, not reading articles about financial statements in Luxembourg.