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Highly skilled Employees in Luxembourg

In January 2011, the Luxembourg tax authority issued a circular on employing highly skilled and specialised international workers.

This special tax regime for highly skilled employees is another step in making the Luxembourg economy more attractive, ensuring it maintains a competitive advantage over other financial centres and jurisdictions.

Employers are often required to cover a large part of the expenses of the person they hire, to attract specialists and to create an incentive for them to establish themselves in Luxembourg.

The tax regime provides a tax and social framework in relation to the treatment of expenses that employers are requested to cover when they want to attract and retain highly skilled individuals to Luxembourg.

Similar tax regimes exist in other European countries which have signed a double tax treaty with Luxembourg for example, Sweden, Belgium and Switzerland.

The main benefits of this new tax regime are :

For highly skilled employees:

Exemption from a number of recurring and non-recurring expenses and costs, incurred by the employer, linked to the redomiciliation and expatriation to Luxembourg ground.

For employers of highly skilled workers:

Tax deduction of these expenses as operating costs.

The tax regime covers the following expenses and costs relative to hiring expatriates:

Moving expenses
Housing costs
School fees of children
Tax equalisation – difference between the personnal income tax charge between Luxembourg and the home country
Exemption of certain recurring expenses

Creatrust offers a range of payroll and administration services like:

advice on salary splitting and tax planning
salary calculation and production of pay slips
formalities in relation to the CCSS and Luxembourg Department of Employment.
management and monitoring of employee leave and sick leave