Taxation of savings for Luxembourg residents
Since 2006, a final flat rate withholding tax of 10% is levied on the interest income of Luxembourg resident individuals. The income liable to fall under this withholding tax is the same as that defined in the EU Savings Directive (exept UCI income).
Taxation of savings for non-residents from EU countries
Since 1st January 2015 Luxembourg does not apply withholding tax system under the Savings Directive anymore, but has switched to the alternative system of automatic exchange of information. No EU withholding tax is thus applied anymore on EU non-residents having an account in Luxembourg, but information about their interest income is sent to their residence country.
Please note that the Savings Directive will soon be abolished and replaced by a complete system of exchange of information on all taxable income of all EU residents with a cross-border interest (i.e. having a company or an account in another EU country), introduced through the Directive on Administrative Administration (DAC).