2026 Tax Panorama

Agenda:

I. Transfer Pricing

Update on the Transfer Pricing landscape in Luxembourg

• Tax Audit: Tax authorities are developing a specialised unit increasing the scrutiny on Transfer Pricing issues.
• TP documentation: Importance of developing contemporaneous Transfer Pricing documentation.
• Case law: What are tax authorities mainly challenging?

II. VAT

• VAT on TP adjustments: When Transfer Pricing adjustments may constitute taxable consideration for intra-group services and how this reshapes VAT risk, documentation and audit exposure.
• Company cars: Latest Luxembourg administrative guidance on the VAT treatment of company cars, with a focus on taxable basis and growing cross-border compliance risks.
• VAT in the Digital Age (ViDA): Key takeaways from the EU’s initiative and the practical steps businesses should start taking now.

III.  Personal tax

• Pension contributions: Effective January 1, 2026, the total pension insurance contribution will increase from 24% to 25.5%, with the responsibility shared among employers, employees, and the State.
• Third Pillar pension savings: For the tax year 2026 onward, the annual tax-deductible limit per taxpayer will be raised from EUR 3,200 to EUR 4,500.
• Tax reforms 2028: Effective January 1, 2028, tax reforms will implement a unified tax class along with revised regulations concerning child allowances, deductions, and expense limits.

IV. Direct tax

• Breaking down the modernised Luxembourg carried interest regime.
• Pillar 2: going through the latest developments and obligations.
• Navigating the modernised ATAD reverse-hybrid regime: focus on the newly clarified CIV exemption.

Guest speaker 

Pascal Rapallino - Chairman, Luxembourg Association of Family Offices (LAFO) – Partner, Côme Maison Financière
Pascal Rapallino will share his view on the current market trends and tax evolutions.