What is the applicable tax treatment?

The taxation applicable to securities portfolios in Luxembourg is relatively favourable, particularly for retail investors, but it varies according to the type of income generated (capital gains, dividends, interest) and the length of time the securities are held.

1. Capital gains tax on securities

• If the securities are held for more than 6 months and do not represent a significant shareholding (<10% of the company's share capital), capital gains are not taxable.
• If the shareholding is significant (>10% of the company’s share capital), capital gains are subject to income tax.

2. Dividends

• Dividends are generally subject to a 15% withholding tax.

3. Interest

• Interest received is generally subject to a 20% withholding tax.