Luxembourg - Tax Guide for Freelance Contractors
Welcome to our guide to Luxembourg Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Luxembourg.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Luxembourg. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Luxembourg.
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Luxembourg Income Tax
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Luxemburg Social Security
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Luxembourg Visas and Work Permits
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Umbrella and Contract Management Services in Luxembourg
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Nationals of the EU/EEA Member States and Switzerland are able to work without restriction in Luxembourg, except for citizens of the two most recent members Bulgaria and Romania.
Bulgarian and Romanian citizens are under a transitional regime since January 1st, 2007. It also has been decided that in some sectors, work permits will be readily granted to Bulgarian and Romanian nationals under a minimal and simplified procedure, without however abolishing the need for a work permit. The sectors concerned are agriculture, viticulture and the hotel and catering sector. For the financial sector, people with specific qualifications for which there is a need that is not met on the labour market, the same flexibility measures will be applied.
For all other nationalities a work permit must be acquired and it is fair to say that the expansion of the EU has made obtaining a permit for non-EU nationals even more difficult.
New immigration Law since October 2008
In October 2008, a new immigration law came into force in Luxembourg. It introduces a combined work and residence permit, called a residence authorisation, that must be applied for by third-country nationals before entering the country. This document is not required by such individuals coming to Luxembourg on business trips for a maximum period of three months in any year. However, they must still declare their presence to the municipality where they reside within three days of their arrival in the country. Third country nationals working in other EU member states may be assigned to work temporarily in Luxembourg provided that they have the appropriate permits to live and work in the other member state.
To obtain a work permit:
No employer may engage a foreign worker who does not have a valid work permit or without having declared the position to be filled to the ADEM (Employment Office) in advance and obtained the work permit. Once the ADEM has examined the request, it will forward the dossier, with its opinion on the case, to the Ministry of Foreign Affairs and Immigration (Ministère des Affaires étrangères et de l’Immigration). Before any decision can be taken on whether to grant, refuse or rescind a work permit, the case must first come before a special advisory committee. Work permits are granted, refused or rescinded by the Minister of Foreign Affairs or the person to whom this responsibility has been delegated.