19 February 2016

Advantages for IP management in Luxembourg

A new IP regime will be soon available


Luxembourg's framework for intellectual property management offers huge advantages and incentives to the discerning investor by making the most of favourable location, jurisdiction and taxation. Similar advantages are available for those looking to make the most of Luxembourg's framework for research and development.

In fact, in many industries, intelligent research and development and intellectual property management can be the key factor in determining stakeholder wealth.

Luxembourg's intellectual property laws allow for certain exemptions from income and capital gains taxes for those who establish the right system of management. For example, those with qualifying intellectual property rights are entitled to a 100% exemption from net wealth tax, while those disposing of qualifying intellectual property may be entitled to a an 80% exemption from any net capital gain.

Nevertheless, under global pressure and to be aligned with the new international standards and the Nexus Approach, Luxembourg has decided to repeal the existing IP regime as from 1July 2016.

According to the budget law as approved last December, Luxembourg will apply a grandfathering rule with a five-year transitional period for taxpayers benefitting from the current regime. New entrants could be admitted to the existing regime until 30 June 2016.

This grandfathering rule also provides two safeguards:

  • Benefit of  the transitional period would be shortened to 31 December 2016 for IP rights acquired from related parties after 31 December 2015 unless the IP rights were already benefitting from the Luxembourg IP regime or a foreign IP tax regime corresponding to the Luxembourg regime at the date of the acquisition.

  • Requirement of a spontaneous exchange of information by the Luxembourg Tax Authorities on the identity of taxpayers benefitting from the existing regime since 6 February 2015.

Creatrust's in-house specialists for expert intellectual property rights management in Luxembourg

For information about IP in Luxembourg, read our Case Studies here.


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