The Luxembourg IP box tax regime for intellectual property
Published on 10 October 2026 · Updated on 10 October 2026
In short
The Luxembourg IP box is the regime of Article 50ter LIR, which exempts 80% of net income from patents, utility models, supplementary protection certificates and copyrighted software developed by the company itself, and exempts those assets from net wealth tax. The exempt share follows the R&D carried out itself (nexus approach). Trademarks are excluded.
Order of magnitude
With a combined rate of about 23.87% in Luxembourg City in 2025, the effective tax on qualifying income falls to around 4.8% before the nexus ratio. Indicative only: have your situation checked by a tax adviser.
Next step
Frequently asked questions
Can a trademark benefit from the IP box?
No. Trademarks, domain names and designs are excluded from the regime.
Does software need a patent?
No. Copyrighted software created after 2007 qualifies, provided the company carried out the R&D itself.
Is the IP box automatic?
The taxpayer claims it in the tax return and must document the nexus ratio: qualifying R&D spending, uplifted by up to 30%, over total spending on the asset.