As a chartered accountant supporting international companies and high-potential talent, I see every day that taxation is the number one lever for the Grand Duchy attractiveness.
4 min read · Article 115, 13b L.I.R.
of gross annual remuneration exempt from income tax
maximum salary base to which the exemption applies
minimum gross annual salary, excluding bonuses
A simplified mechanism for maximum efficiency
Since the major reform that came into force in 2025, the inpatriate regime has changed radically. Gone is the heavy administrative burden of reimbursing actual expenses: we are now in the era of the flat-rate exemption. Here is a breakdown of a mechanism that can transform your remuneration policy.
The new regime (governed by Article 115, 13b of the L.I.R.) has become a genuine headline attraction. Its operation is now crystal clear: 50% of gross annual remuneration is exempt from income tax.
This measure applies to a salary base of up to 400,000 EUR. In practical terms, a senior executive can see half of their salary (up to 200,000 EUR) completely free of tax.
The 5 eligibility conditions: My expert analysis
To benefit from this advantage, the tax authorities are uncompromising on the conditions. Here are the key checks we carry out during our audits:
Why delegate the implementation to your accountant?
While the calculation has become flat-rate, tax compliance remains a highly precise exercise. An error in the annual declaration to the withholding tax office (to be submitted before 31 January) can result in the employee losing the benefit and the employer facing tax adjustments.
Eligibility audit
We validate each application before hiring to secure the commitment made to the candidate.
Payroll optimisation
We seamlessly integrate the exemption into your withholding tax calculations.
ACD reporting
We handle all communications with the Administration des Contributions Directes.
“The inpatriate regime is no longer just a tax tool – it is a salary negotiation argument. For the same employer cost, you offer a significantly higher net salary than your European competitors.”
Let us secure your next hires
Are you planning to recruit an international profile, or would you like to check whether your current employees can switch to this new flat-rate regime? Do not leave your tax strategy to chance.