Understanding Subscription Tax in Luxembourg

What is subscription tax — and who has to pay?

In Luxembourg, investment funds pay something called the subscription tax — or “taxe d’abonnement.” It’s not charged to individual investors, but directly to the fund itself.

This tax applies to UCIs governed by:

The law of 17 December 2010 on undertakings for collective investment.
The law of 13 February 2007 on specialised investment funds (SIFs).
The law of 23 July 2016 on reserved alternative investment funds (RAIFs).

It’s calculated based on the fund’s net asset value (NAV) and must be paid quarterly. The authority in charge: Luxembourg’s Administration de l'enregistrement, des domaines et de la TVA (AED).

Subscription tax Luxembourg: how much is it?

There are several tax rates, depending on the structure of the fund.

Fund Type	Subscription Tax Rate
Standard UCIs (Part I & II of 2010 Law)	0.05%
SIFs and RAIFs	0.01%
Money market funds	0.01%
UCIs reserved to pension schemes	0.00%
Funds investing only in other taxable UCIs	0.00%
ESG-qualified UCIs (partial exemption)	0.01% or lower

Funds aimed at pension schemes are fully exempt. RAIFs structured as limited partnerships (without legal personality) are also treated like SIFs — and benefit from the reduced rate.

How it’s calculated (with example)

The tax is calculated on the average net assets during a quarter. The formula looks like this:

NAV × Rate × 0.25 = Quarterly Tax

For example:

A UCITS fund with €200M average NAV per quarter, taxed at 0.05%, pays:€200,000,000 × 0.0005 × 0.25 = €25,000 per quarter That’s €100,000 per year, fixed regardless of returns.

The fund files its return electronically via the eCDF platform and pays no later than the 20th day after the end of the quarter.

Who can apply for exemptions or lower rates?

There are a few ways funds can pay less — or nothing at all.

Funds set up exclusively for pension purposes: fully exempt.
ESG (environmental, social, and governance) investment funds: potentially reduced to 0.01%, if they meet the right screening criteria.

You can find official guidance on this in the Deloitte summary.

If you need help with filings, EasyBiz offers dedicated tools for regulatory and accounting support. See our accounting service for more.

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How does subscription tax differ from other Luxembourg taxes?

Unlike most taxes, which are profit- or transaction-based, the subscription tax is based solely on the fund’s NAV. It’s more of a “maintenance cost” for operating an investment vehicle in Luxembourg.

It doesn't depend on profits. Even if your fund makes no returns, you’ll still owe the tax. That makes it predictable — helpful for planning — but also less forgiving for smaller or underperforming funds.

Here’s how it compares:

Tax Type	Applied To	Paid By	Rate
Subscription tax	UCIs (investment funds)	The fund	0.01% – 0.05%
Corporate income tax	All companies (incl. funds)	Legal entities	~24.94% combined
Net wealth tax	Companies with assets	The company	0.05% – 0.5%
VAT	Sales of goods/services	The seller	Standard: 17%

The subscription tax is unique to Luxembourg’s fund system. For other types of businesses, you’ll want to check our guide to tax compliance in Luxembourg.

Filing and payment: how it works

Filing is fully digital. All reports must go through eCDF — Luxembourg’s secure tax portal, which is the country’s standard interface for all corporate tax filings. Fund administrators must be registered and authorised to access this platform. Most reporting is managed by professional firms or designated agents who are familiar with eCDF workflows.

To file, your fund (or tax agent) needs authorised access to the system.

Here’s the timeline:

Quarterly reporting
Deadlines:
- Q1 (Jan–Mar): pay by 20 April
- Q2 (Apr–Jun): pay by 20 July
- Q3 (Jul–Sep): pay by 20 October
- Q4 (Oct–Dec): pay by 20 January

Payments go to the Administration des contributions directes (ACD) via bank transfer.

Important: late filings = automatic penalties and interest. If you’re running a fund, keep a strict calendar.

What fund managers should keep in mind

If you’re managing a UCI — or thinking of launching one — here’s what you should do:

🔎Check if your fund is eligible for reduced rates or exemptions (especially ESG status)
⚠️Track NAV accurately — mistakes here can lead to overpayment or underpayment
⏰Don’t miss deadlines — late reports can result in avoidable fines
💡Get support from local experts who know the ins and outs of eCDF

Still exploring your options? You might want to check this: Can a foreigner start a business in Luxembourg.

Conclusion

For Luxembourg-based funds, the subscription tax is part of the cost of doing business. While the rates are low, understanding the rules — and acting on time — is crucial to avoid penalties.

There’s also an opportunity here. If your fund supports pension schemes or meets ESG standards, you may be eligible to pay 0.00% or 0.01% instead of the standard rate of 0.05%.

And with a platform like EasyBiz handling filings and accounting, staying compliant becomes much simpler.

FAQ

Who pays the subscription tax in Luxembourg?

The subscription tax is paid directly by the fund itself — not by its individual investors. It’s calculated based on the fund’s net asset value (NAV) and must be reported quarterly. This makes it part of the operating costs for running a regulated fund in Luxembourg, rather than a burden passed onto shareholders. Even passive investors in the fund are not affected directly by this tax.

When is it due?

The tax is due every quarter, and the deadline is always the 20th day after the quarter ends. For example, the tax for Q1 (January–March) must be paid by 20 April. Returns must be filed through the Luxembourg eCDF platform, which is the official electronic portal for tax and financial declarations. Payments are made via bank transfer, and late submissions may result in automatic penalties and interest charges.

Are some funds exempt?

Yes. Certain fund types qualify for full exemptions from the subscription tax. These include: Pension-related investment vehicles, UCIs that invest solely in other UCIs already subject to the subscription tax.In both cases, the exemption is designed to avoid double taxation or to support long-term financial planning, like retirement funding. However, proper documentation must be in place to prove eligibility — so it’s important to review legal setup and asset allocations.

Can ESG funds pay a lower rate?

Yes, ESG-focused funds may benefit from a reduced subscription tax rate, typically around 0.01%, provided they meet certain environmental, social, and governance criteria. These criteria are generally based on classification under the EU’s SFDR regulation or similar frameworks. It’s important to note that eligibility is not automatic — funds must undergo ESG screening and may be asked to provide regular reporting to retain the lower rate.

Does this replace other taxes?

No. The subscription tax does not replace other taxes like corporate income tax or net wealth tax. Depending on how the fund is structured and the nature of its income, it may still be liable for: Corporate income tax (currently around 24.94% for standard entities) and Net wealth tax (0.05%–0.5% for applicable companies). That said, many regulated investment funds are exempt from these other taxes under Luxembourg law, but this depends on their legal form and whether they conduct commercial activities.

Subscription Tax Luxembourg: What You Need to Know