For the structure: a lower rate and losses that no longer expire
The Finance Minister tabled bill n°8800 on 7 October 2026, together with the 2026-2030 multi-annual financial plan. Its fiscal chapter is short, but it touches every entity a sub-threshold AIF relies on: the registered AIFM, the GP, the holding SPVs and the people who run them.
Corporate income tax falls by one point from tax year 2027. The headline rate goes from 16% to 15% and the reduced rate from 14% to 13%. The reduced rate also reaches further: it now covers taxable profit up to €200,000 instead of €175,000, with a smoothing band up to €250,000.
For a company in Luxembourg City, the all-in rate (corporate income tax, solidarity surcharge and municipal business tax) drops from 23.87% to 22.80%. The many GP and management companies whose taxable profit stays below €200,000 land at 20.66%.
Tax losses stop expiring. The 17-year carry-forward limit introduced in 2017 is abolished, for corporate income tax and municipal business tax alike. A ten-year fund rarely hit that limit, but evergreen family-office platforms, long-dated real-asset vehicles and SPVs that carry set-up and financing costs for years before an exit will welcome the change.
For the people: twelve months, not six
One measure goes the other way. For individuals, a gain on shares is tax-free only once the shares have been held for more than twelve months, up from six. The same twelve-month clock now applies to carried interest linked to a participation under the modernised regime, to substantial participations and to non-residents.
For GP teams and family-office co-investors, that is the item to write into exit and distribution calendars. A disposal within a year of acquisition becomes a speculative gain, taxed at ordinary progressive rates.
Employers get a lighter load. The nominative lists of employees under the impatriate regime and the profit-sharing bonus disappear. The information that supports both regimes is instead filed electronically with the RTS tax office by 1 March of the following year, a welcome simplification for the Luxembourg-based investment teams that use them.
For the assets: a bigger investment credit, a retail-sized housing measure
The investment tax credit for digital transformation and the energy transition rises from 18% to 21%. On tangible assets, the specific credit goes from 6% to 9%, which stacked on the 12% general credit also reaches 21%. Managers building their own data and reporting stack, and Luxembourg-based portfolio companies, are the natural beneficiaries.
Rental housing gets accelerated depreciation at 6% instead of 4%, already for tax year 2026. The measure is capped at a depreciable base of €600,000 at completion, which keeps it a retail-sized incentive with little reach for institutional residential strategies.
Announced alongside the budget
Two further measures were announced with the budget but sit outside bill n°8800. Gifts of a business in direct line or to a partner are to become exempt, which matters for family holdings planning a transfer.
A dedicated stock-option regime for young innovative companies, already before Parliament as bill n°8782, defers tax to the sale of the shares and taxes the gain at a quarter of the global rate. Eligibility is limited to companies under ten years old, with fewer than 150 employees and under €30 million of turnover or balance sheet, which is good news for VC-backed portfolio companies.
Let’s discuss
At SableRock, a boutique firm built for sub-threshold AIFs and family offices, we are already walking our clients through what the bill means for their GP, their SPVs and their carry. Happy to do the same for you.