Good news, above all for operating and real estate companies: the minimum net wealth tax (NWT) has been overhauled with effect from 1 January 2025. The reform follows a decision of the Luxembourg Constitutional Court of 10 November 2023, which struck down part of the previous regime.
Until 2024, companies whose financial assets, transferable securities, intra-group receivables and cash exceeded both 90% of their balance sheet and EUR 350,000 paid a flat minimum NWT of EUR 4,815. The Constitutional Court found this unequal for balance sheets between EUR 350,000 and EUR 2 million, which have since paid EUR 1,605. All other companies were subject to a progressive scale that could reach EUR 32,100.
The 90% financial assets test disappears. The minimum NWT now depends solely on the total balance sheet:
- EUR 535 up to EUR 350,000;
- EUR 1,605 above EUR 350,000 and up to EUR 2 million;
- EUR 4,815 above EUR 2 million, which becomes the maximum.
In practice, a real estate company with a balance sheet of EUR 25 million now pays EUR 4,815 instead of EUR 21,400, a saving of EUR 16,585 every year. For holding and financing companies, the amount stays at EUR 1,605 or EUR 4,815 depending on their size, but the 90% test no longer needs to be monitored.
Want to know what the new scale means for your structure? JW Partner is happy to review your NWT position. Reach out to us!