Identifying and reporting income from the purchase or sale of shares or other securities
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As a taxpayer, capital gains realised on investments held in your personal portfolios are taxable in Luxembourg.
A capital gain is the difference between the selling price and the purchase price of shares or other securities. This involves in particular the sale of shareholdings in Luxembourg companies (e.g. companies whose capital is divided into shares, or cooperative societies) or in foreign companies.
Capital gains must be reported on the taxpayer’s income tax return. Capital gains are added to your other income in order to determine your income tax liability.
Who is concerned
- the resident taxpayer; or
- the non-resident taxpayer who has opted to be treated as a Luxembourg resident for tax purposes;
who realises capital gains (or capital losses, where applicable) from Luxembourg and/or foreign sources.
How to proceed
Tax treatment applicable to capital gains
The table below summarises the tax treatment applicable to your capital gains. Income from capital gains is also subject to a 1.4 % long-term care insurance contribution. This contribution is levied by the tax authorities when issuing the taxpayer’s tax statement.
A shareholding in a company (company whose capital is divided into shares, cooperative company, etc.) is considered to be significant if you have held, either alone or together with your spouse/civil partner and minor children, more than 10 % of the company’s share capital, either directly or indirectly, at any time over the 5 years preceding the date of disposal/sale of the shares.
Capital gains realised during a calendar year in an amount less than EUR 500 are not taxable.
The EUR 50,000 allowance (doubled for married couples/civil partners who are taxed jointly) is reduced by the amount of any allowances granted to you over the 10 years preceding the tax year during which you realised a capital gain on the sale of shares or property.
| Shareholdings held for fewer than 6 months | Shareholdings held for more than 6 months | |
|---|---|---|
Shareholdings of less than 10 % of a company's share capital |
Taxation at ordinary progressive rates ranging from 0 % to 42.80 % or 43.60 % | Exemption |
Shareholdings of more than 10 % of a company's share capital (significant shareholding) |
Taxation at ordinary progressive rates ranging from 0 % to 42.80 % or 43.60 % | Taxation at half of the overall rate maximum rate of 21.40 % or 21.80 % and EUR 50,000 allowance (doubled for spouses/civil partners filing jointly) |
Example:
1. You are a single (unmarried) taxpayer and in 2021 you realised:
- a capital gain of EUR 10,000 on the disposal of a significant shareholding in a company (greater than 10 %) held for longer than 6 months; and
- a capital gain of EUR 30,000 on the disposal of a property asset held for longer than 2 years.
These capital gains were not taxable as they amounted to less than EUR 50,000. You have a remaining allowance of EUR 10,000 (EUR 50,000 minus EUR 40,000).
2. In 2022, you realised a capital gain of EUR 15,000 on the disposal of a significant shareholding held for longer than 6 months. A capital gain in the amount of EUR 5,000 is therefore taxable (EUR 15,000 minus the remaining allowance of EUR 10,000).
For tax years 2023 to 2031 inclusive, you will no longer be entitled to an allowance.
Capital gains can be offset by capital losses. However, capital losses cannot be offset against other categories of income and may not be carried over to the following tax years.
Declaring income from the sale of shares
If you file an income tax return, you must declare your capital gains (or capital losses, where applicable) realised during the tax year concerned.
You must enter the following information under 'miscellaneous net income' (revenus nets divers) on the basis of supporting documents (e.g. a certificate issued by your Luxembourg and/or foreign bank):
- capital gains realised on the disposal of a shareholding of more than 10 % in a foreign or Luxembourg company—such as a public limited company (société anonyme - S.A.) or private limited company (société à responsabilité limitée - SARL)—held for longer than 6 months.
- capital gains on the disposal of a shareholding held for fewer than 6 months (regardless of the percentage shareholding).
In these 2 cases, you must attach a separate sheet with transaction details for all capital gains (and capital losses, where applicable) and indicate the following information: the name of the company in which you invested, the selling price, the purchase price, the purchase date, the date of disposal, and the percentage shareholding in the company.
Non-taxable capital gains (the total proceeds for the tax year are less than EUR 500 or exempt) are not to be reported on the income tax return.
Online services and forms
Who to contact
-
Luxembourg Inland Revenue (ACD)
- Address:
- 33, rue de Gasperich L-5826 Hesperange Luxembourg
Please click on the link above to find the competent department.
Related procedures and links
Procedures
Links
Further information
-
Revenus nets divers
sur le site de l'Administration des contributions directes
-
Mémento fiscal - Résumé des impôts directs perçus
sur le site de l’Administration des contributions directes (ACD)
Legal references
concernant l'impôt sur le revenu
