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Tax on savings

Flat-rate withholding tax

The law on flat-rate withholding tax came into force on 23 of December 2016. The 20% withholding tax concerns all individuals resident in Luxembourg and is collected on the income earned on certain saving products in the form of interest.

The wealth tax levied on resident and non-resident individuals has been abolished.

The flat-rate withholding tax is paid in full discharge of a person’s Luxembourg tax liability. Savings income that has been subject to this tax does not need to be declared to the tax authorities.

The withholding tax is deducted by the bank and paid anonymously, with no reference to personal data, in the form of a global amount declared to the direct taxation authority. Banking secrecy is thus maintained.

The law provides for exemptions. Interest that is only paid out once a year on savings deposits and that does not exceed an amount of 250 EUR per person and per paying agent is exempt from withholding tax.

Savings income not subject to withholding tax should be listed on the annual tax returns.

Withholding tax on
savings products from
Raiffeisen Bank

Product

Withholding tax

Current account with remuneration below 0.75%

No

Current account with remuneration over 0.75%*

Yes

Call deposit

Yes

On-demand savings account*

Yes

Term deposit

Yes

Saving income

Yes

R-PENSION pension policy

No

SICAV R-PLANINVEST savings plan

No

Home savings account (Schwäbisch Hall)

No

SICAV (capitalisation and distribution)

No

Savings certificates or bonds issued before 1st March 2001

No

Savings certificates or bonds issued after 1st March 2001

Yes

* Withholding tax also applies to Green Code accounts.

For further information on this law or to learn more about products exempt from withholding tax, please contact your usual advisor or the Raiffeisen agency of your choice.