search

The Law of April 17, 2018 therefore lays down a new framework of tax incentives for research and development activities aimed at consolidating a competitive framework for innovation in Luxembourg.

According to data published by the European Patent Office and the European Union Intellectual Property Office, IPR-intensive activity sectors accounted for 42% of GDP and 27.8% of direct jobs (or 60 million employees) in the European Union between 2011 and 2013.

As with the previous intellectual property regime, the new provisions provide for an exemption from income tax of 80% of the amount of adjusted and compensated net eligible income.

However, the field has been restricted to patents (in the broad sense) and computer software. Trademarks and domain names are no longer on the list of eligible assets.

Substantial activity and eligible expenditure

Moreover, for a company to benefit from this partial tax exemption, it must justify substantial R&D activities (that is to say that it makes eligible expenses directly related to income from intellectual property rights) and that it has itself borne the costs of R&D. Thus, profits are taxed directly in the country where value creation has occurred and cannot be artificially transferred to other countries.

Article 50ter nevertheless allows companies with their head office in Luxembourg to carry out their R&D activities in a permanent establishment located in another country of the European Economic Area, on the condition, in particular, that R&D expenditure is allocated to them under a preventative double taxation treaty.

The level of the amount that may be partially exempted depends on the extent of the R&D activities undertaken by that company and is determined by the level of eligible expenditure actually incurred.

Read more

Luxembourg joins NATO's DIANA network

22-04-2024

In a joint effort by the Luxembourg Directorate of Defence and Luxinnovation, a selection of national innovation facilities has just been selected to integrate the DIANA (Defence Innovation Accelerator for the North Atlantic) network of NATO.
Read more

Waste heat: Time to take action

28-03-2024

The workshop organised by Luxinnovation on 26 March highlighted the need to take appropriate measures to reuse "lost" heat in industrial processes. An EU directive also supports this approach.
Read more

Business Partnership Facility launches 11th edition

15-03-2024

A new call for projects has been launched by the Luxembourg Cooperation with a view to co-financing innovative business partnerships in developing countries up to €200,000. Submission deadline: 30 April 2024.
Read more

International recognition for Fit 4 Start and the LCI

14-03-2024

A publication from the Financial Times and Statista highlights the foundational work carried out by two key organisations in Luxembourg's startup ecosystem.
Read more

The advantages of waste heat

29-02-2024

A workshop to be organised by Luxinnovation at the end of March on the theme of waste heat and its usage will help to better understand the enormous potential gains in terms of energy efficiency and profitability.
Read more

Resources all news

Fermer