Becoming a Luxembourg Tax Resident: Complete Guide
Mickaël LOC
Tax Expert ·
Becoming a Luxembourg Tax Resident: Complete Guide
Tax residence in Luxembourg is determined primarily by the criterion of habitual domicile (183 days of presence or center of vital interests). Tax residents are taxed on their worldwide income, while non-residents are only taxed on their Luxembourg-source income. Resident status offers significant tax benefits.
Tax residence criteria
An individual is considered a Luxembourg tax resident if they have their tax domicile (permanent home) in Luxembourg or if they habitually reside in Luxembourg for more than 183 days over a 12-month period. In case of a residence conflict with another state, double taxation treaties determine residence through successive criteria: permanent home, center of vital interests, habitual abode, nationality. Registration in the municipal population register is a strong indicator but not sufficient on its own.
Registration steps
- Arrival declaration at the municipality of residence within 8 days of moving in
- Registration with social security (CCSS) if engaged in professional activity
- Tax withholding card (RTS) request with the Administration des Contributions Directes
- Opening a Luxembourg bank account
- For non-EU nationals: residence permit application with the Immigration Directorate
Benefits for HNWIs
Luxembourg attracts wealthy individuals thanks to the absence of wealth tax for individuals (abolished in 2006), the absence of inheritance tax in direct line above certain thresholds, a top marginal income tax rate of 42% (more moderate than neighbouring countries), and the possibility of using investment structures such as SPFs (Family Wealth Management Companies) or Luxembourg life insurance contracts benefiting from the security triangle. Political stability, quality of life and multilingualism complete the Grand Duchy's appeal.
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