The 2026 budget bill mentions the continued implementation of the OECD Pillar Two minimum taxation rules for large multinational groups.  For further background, please see our tax flash on the Luxembourg implementation. The government estimates that these rules will generate EUR 80 million in additional revenue in 2026.

The technical adjustments include an update of the revaluation coefficients applied to acquisition prices for capital gains taxation on real estate to reflect inflation. Excise and environmental taxes will be adjusted in line with the government’s climate policy, such that carbon taxes will increase by EUR 5/ton to EUR 45/ton in 2026. No new environmental or financial transaction taxes are introduced.

The government will continue preparatory work on the individualisation of personal income tax, but no legislative proposal on this topic is included in the 2026 budget.

In summary, taxpayers can continue relying on a stable and predictable political and tax environment in Luxembourg. Next to positive tax reforms implemented or announced in the recent months, the government and the tax authorities are also work on increasing legal certainty through administrative circulars. The 2025 budget bill will go through the regular parliamentary review process and is expected to be voted before the end of the year. 

Should you have any question, please do not hesitate to contact our team or one of your trusted advisers.