Taxes

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?

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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.

Undertakings for Collective Investment (UCI)

Reserved Alternative Investment Funds (RAIF)

Specialized Investment Funds (SIF)

Family Wealth Management Companies (SPF)

Luxembourg

Tax

Guide

What taxes to pay in Luxembourg.

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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 At the same time, the Grand-Ducal regulation was adopted, which repealed two outdated provisions on the conditions and criteria for subscription tax for UCIs and SIFs.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

There is an exemption for European Long-Term Investment Funds. To encourage investment in ELTIFs, the law on SIFs or their sub-funds that have been authorized as ELTIFs may be fully exempt from the subscription tax. The same applies to RAIFs and their sub-funds. To qualify for this exemption, the fund must disclose its net asset value in a report to the Luxembourg Registration Duties, Estates and VAT Authority.

PEPPs

Pan-European Personal Pension Products. In accordance with the law and at the request of the European Commission, UCITS and Part II UCIs reserved for investors in PEPP’s are exempt from subscription tax.

MMFs

Money market funds qualifying as short-term money market funds and having received the highest rating from a recognized rating agency, are exempt from subscription tax.

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.