Luxembourg attracts talent: new tax regime for impatriate workers in 2025

Luxembourg is preparing to become a magnet for international talent thanks to a new tax regime for impatriate workers, effective Jan. 1, 2025. This strategic move aims to strengthen the country's competitiveness, attract highly skilled professionals and stimulate economic growth.

Key points:

• Tax exemption: Impatriate workers will be eligible for a 50 percent tax exemption on annual gross salary, up to a maximum of €400,000.
• Duration: The tax-advantaged scheme will last for 8 years (the year of arrival plus the following 7).
• Requirements: To access the benefit, workers will have to meet certain requirements, including:
  - Tax residence in Luxembourg
  - Not having been a tax resident of Luxembourg for the past 5 years
  - Minimum gross annual salary of €75,000
  - Carrying out professional activity in Luxembourg for at least 75 percent of working hours
  - Not replacing an existing employee in the company
  - Fall within the maximum limit of 30% of the company's workforce (with exceptions for younger companies)
  - Possess a specialization in their field
  - Be employed by an employer based in Luxembourg or the European Economic Area (EEA)

Benefits for companies:

The new tax regime is also an attractive opportunity for Luxembourg companies, which will be able to more easily attract international talent and benefit from specialized skills.

Transitional period:

Those already under the old tax regime will be able to choose whether to continue under it until its natural expiration or switch to the new regime.

Conclusion:

Luxembourg is positioned as an increasingly attractive hub for professionals from around the world, offering an environment conducive to personal and professional growth.