In an interview with Luxemburger Wort, Luxembourg’s Finance Minister Gilles Roth outlined the Ministry of Finance’s priorities for maintaining the financial centre’s competitiveness, including a possible tax incentive regime for performance-related management bonuses aimed at attracting fund promoters and a continued push on digitalisation and tokenised financial products. He positioned Luxembourg as an EU gateway with more than 118 international banks from 25 countries and cross-border distribution reach into more than 70 markets. The fund industry was described as the world’s second-largest international hub with EUR 7.3 trillion in assets under management, with growth expected from alternative funds, ETFs and European Long-Term Investment Funds, noting that around two-thirds of ELTIFs launched in Europe over the last three to four months were set up in Luxembourg; recent measures cited included abolishing the subscription tax on ETFs. The interview also highlighted the Markets in Crypto-Assets Regulation being fully applicable since January 2025 and Luxembourg’s blockchain law adopted in December 2024, citing HSBC’s Orion platform used by the European Investment Bank for digital bond issuance and a fully tokenised Franklin Templeton fund, alongside a 2024 sustainable finance action plan covering ten priority areas such as blended finance partnerships with the European Investment Bank and the Switzerland-based SIFI, a focus on gender-equality finance, and strengthening the Luxembourg Sustainable Finance Initiative. On market functioning, Roth welcomed a joint Luxembourg Bankers’ Association and Commission de Surveillance du Secteur Financier initiative to clarify account-opening expectations, and pointed to Luxembourg’s 2024 budget surplus of 1% of GDP and public debt ratio of 24.7%, against an objective to remain below 30%. Roth indicated the proposed tax regime for performance-related bonuses could be finalised by end-2025, and referenced other competitiveness measures including the revised impatriate regime offering a 50% lump-sum income exemption capped at EUR 400,000 and a planned favourable tax treatment for employee share option plans for start-up staff, alongside work to adapt the legal framework to attract fully digital banks.
Ministry of Finance (Luxembourg) 2025-07-08
Luxembourg Ministry of Finance signals potential end-2025 tax regime for performance-related bonuses to attract fund promoters
Luxembourg's Finance Minister Gilles Roth aims to boost the financial centre's competitiveness with potential tax incentives for performance-related bonuses and a focus on digitalisation and tokenised financial products. Positioned as a key EU gateway with a strong international banking presence and fund industry, Luxembourg benefits from recent regulations like the Markets in Crypto-Assets Regulation and blockchain law. Initiatives include a sustainable finance action plan and efforts to attract digital banks, with a proposed tax regime for bonuses expected by end-2025.