SOPARFI

A SOPARFI in Luxembourg is subject to various taxes, including corporate income tax (CIT), municipal business tax (MBT), and a contribution to the unemployment fund, resulting in a combined tax rate of 24.94% as of 2023 for companies in Luxembourg City. Additionally, it is subject to a net wealth tax (NWT) of 0.5% on net assets, with a reduced rate of 0.05% for net wealth exceeding EUR 500 million. A minimum NWT of EUR 4,815 applies under specific conditions.

As a normally taxable company, a SOPARFI benefits from Luxembourg’s extensive tax treaty network and EU Directives, avoiding double taxation on dividends, interest, and royalties. Under certain conditions, dividends, liquidation proceeds, and capital gains from shareholdings can be exempt from income tax through the participation exemption.

Dividends distributed by a SOPARFI are generally subject to a 15% withholding tax (WHT), which can be reduced or exempted under tax treaties or EU Directives. Non-resident shareholders are exempt from Luxembourg capital gains tax on the sale of shares if they hold less than 10% of the share capital or if the sale occurs after six months of acquisition. Liquidation proceeds distribution is not subject to Luxembourg WHT.