Thomas Badri
Thomas Badri
Luxembourg’s latest tax reforms: Pillar 2, DAC 9 and start-up investment
February 10, 2026
Luxembourg’s latest tax reforms combine Pillar 2 and DAC 9 implementation with targeted support for start-up investment, reinforcing alignment with international tax standards while fostering innovation. They reflect the country’s commitment to remaining fully aligned with international tax standards while staying attractive to the innovative and entrepreneurial economy.
These reforms concern, on one hand, the taxation of international groups under the Pillar 2 framework, and on the other hand, support for private investment in innovative start-ups.
A strengthening of the international tax framework and transparency
The first law enacted implements the European directive known as “DAC 9,” which organises the automatic exchange of tax information related to the GloBE framework, the central pillar of the international minimum taxation project for large companies. This framework requires the affected multinational groups to submit a standardised report allowing tax authorities to assess their effective tax rate and, where applicable, collect a supplementary tax.
With this reform, Luxembourg establishes a clear legal basis for these information exchanges between states and aligns its national legislation with the latest European and international guidelines. The goal is twofold: to ensure greater transparency while providing a stable and predictable framework for businesses operating in Luxembourg.
The law also introduces technical adjustments aimed at facilitating the practical implementation of these obligations and reducing redundant formalities. It thus reflects a logic of compliance, as well as administrative pragmatism.
A new tax tool to support innovative start-ups
At the same time, the Luxembourg legislature introduced a measure focused on the local economy and innovation. Starting from the 2026 fiscal year, a new tax credit will be granted to individuals who invest in innovative start-ups meeting specific criteria regarding age, size, and activity.
This measure aims to encourage private capital contributions to young companies, strengthening their financial structure and supporting their development during the early years of operation. The scheme is reserved for external investors and targets companies demonstrating genuine innovation, particularly through their research and development activities.
Through this mechanism, Luxembourg seeks to energise its entrepreneurial ecosystem and promote the emergence of high-value projects within its territory.
An overall perspective: international rigour and economic attractiveness
Although these two reforms target different audiences, they are part of the same strategy. Luxembourg fully embraces the new international requirements on taxation and transparency for large groups while implementing targeted measures to support innovation, private investment, and the growth of start-ups.
This combined approach reflects a clear positioning: in an increasingly harmonised and regulated global tax environment, attractiveness no longer depends solely on taxation, but also on the quality, coherence, and predictability of the legal and economic framework.
Want to go further? Our Omnitrust experts are at your disposal
These tax reforms create both opportunities and practical considerations for companies, investors, and international groups operating in or with Luxembourg. Understanding their scope and implications is essential to ensure compliance, optimise tax positioning, and support strategic decision-making.
Omnitrust’s tax experts support clients in navigating these changes, assessing their impact, and identifying relevant advisory opportunities in line with their business objectives. We combine international tax expertise with local insight to help you anticipate developments and maximise value within Luxembourg’s evolving tax framework.
