The impatriate regime in Luxembourg: half your salary exempt, from 75,000 euros

Yes, Luxembourg has a special tax regime for those hired from abroad for a specialised position: the regime for impatriés. Since 1 January 2025 it works simply: 50 per cent of your annual gross salary is exempt, with a ceiling of 400,000 euros of salary — an exemption of at most 200,000 euros — for eight years. The thresholds are high, though: a fixed annual salary of at least 75,000 euros and at least five years of specialist experience. The find on guichet.lu is a condition that appears in no summary: in the five years before, you may not have lived within 150 kilometres of the Luxembourg border.

What does the regime deliver?

Under the new regime, in force since 2025, there is only one benefit left: half of your annual gross salary, excluding exempt benefits, does not count for tax. You may then not deduct the social security contributions on that exempt part.

Fixed gross annual salary	Exempt	Taxed salary
74,000 euros	nothing — below the threshold	74,000 euros
100,000 euros	50,000 euros	50,000 euros
400,000 euros	200,000 euros	200,000 euros
600,000 euros	200,000 euros — the ceiling	400,000 euros

The regime runs for the eight years following the year of your arrival in Luxembourg. Whoever starts in 2026 therefore falls under it up to and including 2034, as long as the conditions continue to be met.

Who is it meant for?

For employees, not for the self-employed and not for pensioners. Guichet.lu distinguishes two groups: those seconded within an international group to a Luxembourg entity, and those recruited directly abroad by a company in Luxembourg. Whoever works through a temporary agency or a staff-lending arrangement is excluded.

As an employee you must:

• make a significant economic contribution or help build new activities with high added value;
• be a Luxembourg tax resident;
• have in-depth technical knowledge, or at least five years of specialist experience in the sector the company needs;
• if recruited from abroad, be specialised in a sector or profession in which Luxembourg struggles to find people;
• have a fixed gross annual salary of at least 75,000 euros, before benefits in cash or in kind;
• share your knowledge with the staff, and replace no one who does not fall under the regime.

The company may use the regime for at most 30 per cent of its full-time staff; for companies established in Luxembourg for less than ten years that limit does not apply.

What is the trap for Dutch people?

The 150 kilometres and the five years go together. In the five tax years before the year in which you start in Luxembourg, you may not have been tax-resident in Luxembourg, not have been taxed in Luxembourg on income from work, and not have lived less than 150 kilometres from the Luxembourg border. Whoever already worked in Luxembourg as a cross-border commuter, or lived in the border region, is therefore excluded. So measure how far your place of residence of the past five years was from the border, before you negotiate your salary.

How do you apply?

You do not apply yourself; it runs through the employer. Each year, by 31 January at the latest, the employer sends a list with the names of the employees who used the regime the year before to the tax office that audits the employer. The tax authority ACD set out in a newsletter of 24 January 2025 how the transition to the new regime worked: those already under the old regime could choose, and that choice was irrevocable.

The old regime reimbursed moving, housing and school costs tax-free. Whoever starts in Luxembourg after 1 January 2025 can only get the new regime, with the fifty per cent.

What does this mean alongside the treaty?

The regime changes nothing about which country may tax your salary; it only lowers the Luxembourg tax base. How Luxembourg taxes the rest of your income, with the table per tax class, is in AOW, pension and tax in Luxembourg. For those considering working for a Luxembourg employer, the rest of the picture — the minimum wage, the recognition of your diploma — is in working in Luxembourg.

Because the conditions rest on facts the employer must substantiate, this is one to take into the negotiation about your contract, and to have a tax adviser check before you sign. Where this falls in your journey is in the step-by-step plan for Luxembourg.

In Vertrekklaar this is phase 1 of 5 of the journey, step 1.2: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Luxembourg or go straight to step 1.2 in the open plan.