Luxembourg

#6 overall · Score 81.9 / 100 · unchanged from 2025

Overall

#6

81.9 / 100

unchanged from 2025

Corporate

#20

64.6 / 100

unchanged from 2025

Individual

#21

59.9 / 100

unchanged from 2025

Consumption

#7

86.4 / 100

down one place from 2025

Property

#15

64.3 / 100

down one place from 2025

Cross-border

#5

89.5 / 100

unchanged from 2025

Strengths

  • Business investments in machinery and intangibles receive better-than-average tax treatment.
  • Luxembourg applies its relatively low VAT rate of 17 percent to the second-broadest base in the OECD, covering 87 percent of final consumption.
  • Capital gains are tax-exempt if a movable asset, such as shares, was held for at least six months, encouraging long-term savings.

Weaknesses

  • Companies are limited in the time period in which they can use net operating losses to offset future profits and are unable to use losses to offset past taxable income.
  • Luxembourg has several distortionary property taxes with separate levies on real estate transfers, estates, and corporate net assets.
  • Luxembourg has a solidarity tax which acts as a 7 percent surtax on corporate income and a 7 to 9 percent surtax on personal income.

Component Scores

Luxembourg category scores out of 100Corporate Taxes: score 64.6, rank 20. Individual Taxes: score 59.9, rank 21. Consumption Taxes: score 86.4, rank 7. Property Taxes: score 64.3, rank 15. Cross-Border Tax Rules: score 89.5, rank 5255075100Corporate Taxes: 64.6 (rank 20)Individual Taxes: 59.9 (rank 21)Consumption Taxes: 86.4 (rank 7)Property Taxes: 64.3 (rank 15)Cross-Border Tax Rules: 89.5 (rank 5)CorporateIndividualConsumptionPropertyCross-border
Category Rank Score vs 2025
Corporate Taxes #20 64.6 unchanged from 2025
Individual Taxes #21 59.9 unchanged from 2025
Consumption Taxes #7 86.4 down one place from 2025
Property Taxes #15 64.3 down one place from 2025
Cross-Border Tax Rules #5 89.5 unchanged from 2025

Ranking Changes, 2014–2026

Luxembourg's best overall rank was 3rd and its worst was 7th. It ranks 6th in 2026.

Overall rank by year for LuxembourgLuxembourg: 2014 rank 3, 2015 rank 4, 2016 rank 4, 2017 rank 6, 2018 rank 7, 2019 rank 7, 2020 rank 6, 2021 rank 6, 2022 rank 7, 2023 rank 5, 2024 rank 6, 2025 rank 6, 2026 rank 62014201520162017201820192020202120222023202420252026Luxembourg 2014: rank 3Luxembourg 2015: rank 4Luxembourg 2016: rank 4Luxembourg 2017: rank 6Luxembourg 2018: rank 7Luxembourg 2019: rank 7Luxembourg 2020: rank 6Luxembourg 2021: rank 6Luxembourg 2022: rank 7Luxembourg 2023: rank 5Luxembourg 2024: rank 6Luxembourg 2025: rank 6Luxembourg 2026: rank 6#3#6

OECD Context

Each row places all 38 countries on a 0–100 score scale for one measure. Luxembourg is highlighted; the dashed line is the OECD median.

All 38 Countries' Ranks

Overall and category ranks for all 38 countries
CountryOverallCorporateIndividualConsumptionPropertyCross-border
Estonia#1#2#1#24#1#7
Latvia#2#1#8#22#4#6
New Zealand#3#31#7#1#8#14
Switzerland#4#7#9#4#36#2
Lithuania#5#3#10#23#6#16
Luxembourg#6#20#21#7#15#5
Czech Republic#7#9#4#32#5#11
Australia#8#29#14#9#3#23
Turkey#9#21#6#15#22#8
Hungary#10#5#3#38#23#4
Israel#11#11#31#11#10#18
Slovak Republic#12#24#2#33#7#17
Sweden#13#6#18#26#9#12
Costa Rica#14#35#13#6#11#29
Canada#15#17#28#8#25#28
Netherlands#16#23#30#14#20#3
United States#17#8#17#3#27#37
Austria#18#18#27#17#17#10
Germany#19#30#34#13#12#9
Norway#20#15#29#27#16#15
Mexico#21#28#26#12#2#38
Finland#22#10#24#28#21#24
Greece#23#22#5#29#30#19
Chile#24#32#23#10#13#36
Slovenia#25#14#12#30#24#30
Korea#26#26#38#2#31#34
Belgium#27#16#15#25#28#21
Japan#28#36#35#5#26#31
Ireland#29#4#36#35#18#27
United Kingdom#30#25#22#34#33#1
Denmark#31#19#37#20#14#32
Poland#32#12#11#36#29#25
Portugal#33#34#19#21#19#33
Iceland#34#13#32#19#34#26
Spain#35#33#20#18#35#20
Italy#36#27#16#37#38#22
Colombia#37#37#25#16#37#35
France#38#38#33#31#32#13

Among European Peers

Luxembourg ranks 5th of 27 European OECD members on the overall index.

Source: 2026 International Tax Competitiveness Index.

Notes on the Data

The 2026 Index uses the most up-to-date data available as of July 2026. Data may not reflect changes in countries making rapid reforms.

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About the Authors

Alex Mengden Tax Foundation
Expert

Alex Mengden

Economist

Alex Mengden is an Economist at the Tax Foundation, where he focuses on international tax issues and tax policy in Europe. He holds a BA in philosophy and economics from the University of Bayreuth and an MSc in economics from the Ludwig Maximilian University of Munich.

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Luis Zarka

Transatlantic Tax Fellow

Luis Zarka was a 2026 Transatlantic Tax Fellow with the Tax Foundation’s Center for Global Tax Policy.

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