An aid scheme for medium energy-consuming (minimum 2%) companies was set up in Luxembourg following the tripartite agreement of 28 September 2022. As a result, the amended law of 15 July 2022, which introduces an aid scheme for businesses severely affected by the increase in energy prices arising because of Russia’s aggression against Ukraine, has entered into force.
In particular, a new financial aid intended to cover the extra costs of natural gas and electricity for medium energy-consuming companies was introduced.
In addition, reference is made to draft bill No. 8276 amending the amended law of 4 December 1967 on income tax.
Draft bill No. 8276 envisages the implementation of certain elements of the so-called “Solidaritéitspak 2.0” agreement concluded at the end of the Tripartite Coordination Committee meetings on 18, 19 and 20 September 2022. It aims to promote and accelerate the ecological and energy transition, as well as the digital transformation at the company level. It also contributes to the achievement of the ambitious national objectives of the PNEC adopted by the Government Council on 21 July 2023.
The draft law intends, among other things, to extend the scope of the tax rebate for investment by specifically targeting investments and expenses made by Luxembourg companies in the context of digital transformation or ecological and energy transition projects. The new tax rebate for investment shall apply from the 2024 tax year.
The main change provided for by the bill is the abolition of the additional tax subsidy and the introduction of a new income tax subsidy due to investments made in the context of the digital transformation or the ecological and energy transition of the company.
The new tax rebate will also be granted for operating expenses related to these investments, which is not currently permitted.
The rate of the new tax subsidy applicable to investments and operating expenses in digital, ecology or energy is 18%.
Given that the nature of investments can be very diversified, encompassing both operating expenses and investments related to digital transformation or the ecological and energy transition, the bill proposes to set up a system of attestation and certification.