On Monday 29 February 2016 the government announced some of the changes that could be expected in the new reform of 2017.
The 0.5% budgetary tax for private individuals will be abolished, whilst the tax credits for low-income households have been doubled to €600 for those with an income between €11,265 and €40,000. The government also reported that the tax threshold has been risen from the €45,897 currently in place, to €49,793.
Prime Minister Xavier Bettel, Étienne Schneider the Minister of Economy, Pierre Gramegna the Minister of Finance and Felix Braz the Minister of Justice also broached the issues of taxation in relation to company cars and electric mobility.
With this new tax reform the government will let those whose transportation vehicles (electric or hydrogen) emit zero emissions to benefit from a tax allowance of €5,000. For those choosing to travel by electric bicycle a reduction of €300 will be enforced.
Anyone using a company car can expect the 1.5% tax to be increased depending of the CO2 emissions and a revision of the tax provisions regarding leased cars.
All these tax reforms are made in the spirit of encouraging as many people as possible to use transport that emits less pollution.
The Tax Reform as a whole is expected to cost between €400 million and €500 million.
Photo by Luxembourg Government (L-R: Félix Braz, Minister of Justice; Pierre Gramegna, Minister of Finance; Xavier Bettel, Prime Minister; Étienne Schneider, Minister of Justice)
