Communal business tax

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For more information please consult our news item on the subject.

Communal business tax (ICC) is a tax levied only on the profits of commercial companies.

Its purpose is to help communes finance their expenses and specifically additional costs engendered by businesses established in the commune (provision of industrial zones, parking spaces, special measures to protect the natural environment, etc.).

It is set and collected by the Luxembourg Inland Revenue (ACD) on behalf of the communes, based on the taxpayer's declaration.

Who is concerned?

Communal business tax is levied on commercial businesses located in Luxembourg:

  • sole proprietors who make an operating profit;
  • partnerships which make an operating profit:
    • partnerships (société en nom collectif - SENC);
    • limited partnerships (société en commandite simple - SCS);
    • civil companies (société civile);
    • de facto companies (société de fait);
  • capital companies, regardless of the nature of their business:
    • public limited companies (société anonyme - SA);
    • limited liability companies (société à responsabilité limitée - SARL);
    • European companies (société européenne - SE);
    • partnerships limited by shares (société en commandite par actions - SECA);
    • Luxembourg permanent establishments of foreign companies in respect of their business in Luxembourg only.

Communal business tax does not apply to:

  • sole proprietors of agricultural and forestry businesses;
  • the liberal professions.

How to proceed

How the tax is calculated

Communal business tax (ICC) is based on the following formula:

ICC = general tax base x base rate x communal rate

The tax base is determined and the business tax is collected by the Luxembourg Inland Revenue (ACD) on behalf of the communal tax inspectors.

How the tax base is determined

The business or company determines its taxable profit.

The starting point for the calculation is the business profit, as determined relative to income tax (or corporate income tax).

The following are added to business profit:

  • profits and salaries attributed to general partners for managing partnerships limited by shares (SECA);
  • losses incurred in:
    • a partnership;
    • a permanent establishment abroad.

The following are deducted from business profit:

  • shares of profit in:
    • a partnership;
    • a permanent establishment abroad;
    • dividends allocated based on an equity holding of at least 10 % in:
      • a resident capital company;
      • a fully taxable non-resident capital company.

Dividends exempted owing to the parent-subsidiary regime are not subject to communal business tax.

Tax allowance

The allowance applies to the following only:

  • sole proprietors;
  • partnerships.

The amount of the allowance is as follows:

  • EUR 40,000 for taxpayers not subject to corporate income tax;
  • EUR 17,500 for others.

The allowance is automatic and not subject to specific conditions or formalities.

Applicable rates

The base rate is stipulated by law. It is 3 %.

The tax base calculated in this way is then multiplied by the communal rate to determine the business tax due. The communal rate is set by each commune based on its financial needs and generally ranges between 200 % and 400 %.


Multiplying factor

Communal business tax rate (natural persons)

Communal business tax rate (companies)

Max rate: income tax + communal business tax (natural persons)

Overall rate: corporate income tax + communal business tax (capital companies – scenario without distribution)


275 %

7.62 %

8.25 %

46.62 %

29.25 %


225 %

6.32 %

6.75 %

45.32 %

27.75 %


300 %

8.25 %

9 %

47.25 %

30 %


The communal business tax declaration is different:

  • for natural persons;
  • for corporate entities; it is included in the corporate income tax return and varies depending on whether they are resident or non-resident entities.

Corporate entities are in principle required to submit an online declaration for business tax with the online input assistant on

The various fields in the assistant can also be automatically prefilled through the import of a structured XML file.

Corporate entities excluded from the mandatory online filing must continue to submit their declaration in paper format. They are: 

  • partnerships;
  • non-resident companies;
  • agricultural associations;
  • cooperative companies.

Tax payments

Tax payments are made by provisional advance instalments based on the following schedule:

  • 10 February;
  • 10 May;
  • 10 August;
  • 10 November.

The balance is payable on receipt of the tax bulletin.

Online services and forms

Online services

Who to contact

Luxembourg Inland Revenue (ACD)

Related procedures and links

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