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Germany vs Luxembourg
Tax Rate Comparison

Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.

πŸ‡©πŸ‡ͺ Germany
vs
πŸ‡±πŸ‡Ί Luxembourg
Tax Year:

πŸ’° Personal Income Tax Calculator

Enter your income to see your estimated annual tax liability in each country β€” side by side.

Enter your annual income above to see your personal tax comparison β†’
Individual Income Tax (Top Marginal Rate)
Top Income Tax Rate
14–45%
Basic allowance ~€12,336; bracket creep relief
No change
0–42%
Tax reform package continuing; thresholds indexed
No change
VAT / GST / Sales Tax
VAT / GST / Sales Tax
7–19%
Standard 19% unchanged
No change
3–17%
Standard 17% maintained
No change
Corporate Tax Rate
Corporate Tax Rate
~29%
Coalition discussions on lowering to 25% ongoing
β–Ό -0.5pp vs 2025
~24.94%
Global minimum tax fully embedded in domestic law
No change
Capital Gains Tax
Capital Gains Tax
25%
Investment income reform proposals under review
No change
0–42%
No major reform
No change
Social Security & Payroll
Social Security / Payroll
~41.5%
Health insurance rising; pension base up
β–² +0.5pp vs 2025
~27%
Pension reform discussions; contribution structure stable
No change
State, Regional & Local Taxes

πŸ‡©πŸ‡ͺ Germany β€” Trade Tax (Gewerbesteuer) & Church Tax

Germany's 16 BundeslΓ€nder apply federal income tax rates uniformly β€” no state income tax variation. Municipalities levy Gewerbesteuer (trade tax) on business profits at ~7–17% effective. Church tax (Kirchensteuer) of 8–9% of income tax applies to registered members. The solidarity surcharge (Soli) now only applies to the top ~10% of earners.

πŸ‡±πŸ‡Ί Luxembourg β€” Municipal Business & Property Taxes

Luxembourg's 102 communes levy the Gewerbesteuer (business tax) on companies at rates set by each commune (base rate 3% + municipal multiplier 175%–400% = effective 6–10.5%), and communal income tax additionals on individuals. Luxembourg City has higher rates than rural communes. The combined corporate tax (national + municipal) ranges from ~24.9% to ~26.01%. Luxembourg is a major holding company and fund domicile jurisdiction with extensive tax treaty networks.

⚠️ Disclaimer: Rates shown are standard top/headline rates for informational purposes. Actual tax liability depends on income level, residency, deductions, and tax treaties. 2025–2026 data reflects announced or enacted rates and may be subject to change. Not financial or legal advice.

Germany vs Luxembourg: Key Tax Differences (2026)

πŸ’° Income Tax: πŸ‡©πŸ‡ͺ Germany has a higher top income tax rate (14–45% vs 0–42%). πŸ‡±πŸ‡Ί Luxembourg is more favourable for high earners.

πŸ›’ VAT/Sales Tax: Germany has a higher consumption tax (7–19% vs 3–17%).

🏒 Corporate Tax: πŸ‡±πŸ‡Ί Luxembourg offers a lower corporate rate (24.94% vs 29%), which can influence business location decisions.

πŸ“ˆ Capital Gains: πŸ‡©πŸ‡ͺ Germany taxes investment gains at a lower rate (25% vs 42%), benefiting investors.

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