Becoming an indépendant in Luxembourg: business permit, the €50,000 VAT franchise, and CCSS contributions
A Luxembourg freelancer obtains a business permit, registers with the RCS and the AED for VAT, and affiliates with the CCSS. The small-business VAT franchise sits at €50,000 turnover from 2025, and social contributions run around 25 to 28% of professional income.
This article is general information, not tax advice. Regulations change — verify the current rules with the official sources below before acting.
Setting up as an indépendant in Luxembourg has a few moving parts at the start, and much of it runs through the guichet.lu business service portal.
Registration, in order
Most independent activities need a business permit (autorisation d'établissement) from the Ministry of the Economy, confirming you meet the qualification and good-repute conditions. You then register with the RCS (trade and companies register) and activate VAT with the AED (Administration de l'enregistrement, des domaines et de la TVA). Finally you affiliate with the CCSS (Centre commun de la sécurité sociale) for social security.
The €50,000 VAT franchise
Luxembourg's small-business franchise exempts you from VAT up to €50,000 of annual turnover, raised from €35,000 effective 1 January 2025, with a 10% tolerance up to €55,000. Under it you charge no VAT and cannot deduct input VAT. Because these thresholds move, confirm the current figure with the AED before relying on it. Cross the line and you register for standard VAT with periodic returns.
Income tax and social contributions
Freelance profit is taxed under the progressive personal income tax on your actual accounts, with a top marginal rate around 45.78% once the employment-fund surcharge is included. Because the tax is on real accounts, careful bookkeeping directly affects your bill.
Social contributions run roughly 25 to 28% of professional income through the CCSS, covering pension, health, and long-term care. The pension share rose to 17% on 1 January 2026. Setting aside a fixed share of every invoice keeps the reconciliation from stinging later.
General information about becoming an indépendant in Luxembourg, current as of the review date above, and not tax advice. Thresholds and rates change — confirm current figures with the AED, CCSS, or a qualified expert-comptable.
Frequently asked questions
What is the VAT franchise threshold in Luxembourg?
€50,000 of annual turnover, raised from €35,000 effective 1 January 2025, with a 10% tolerance up to €55,000. Under the franchise (régime de la franchise) you charge no VAT and cannot deduct input VAT. Because thresholds move, confirm the current figure with the AED before relying on it.
How much do Luxembourg self-employed pay to the CCSS?
Social contributions run roughly 25 to 28% of professional income, collected by the CCSS (Centre commun de la sécurité sociale), covering pension, health, and long-term care. The pension share rose to 17% on 1 January 2026. Contributions are assessed on your professional income and reconciled once actual figures are known.