Luxembourg Overhauls Carried Interest Tax Rules in Bid to Lure Private Equity Talent

Luxembourg overhauls carried interest regime to attract alternative managers

Luxembourg has substantially reformed its carried interest regime, effective from the 2026 tax year, which could benefit alternative investment managers in the region. The new legislation introduces two specific regimes applicable to different types of carried interest: contractual carried interest, which will be subject to a maximum personal income tax rate of 11.45 per cent, […] The post Luxembourg overhauls carried interest regime to attract …

Luxembourg overhauls carried interest tax rules in bid to lure private equity talent

Parliament has approved changes allowing more investment professionals to be taxed at a lower capital gains rate on profit-sharing bonuses

Luxembourg enacts its new carried interest tax framework: Key highlights | ATOZ Tax Advisers Luxembourg

Luxembourg enacts its new carried interest tax framework: Key highlights On 22 January 2026, Luxembourg Parliament enacted a major reform updating and clarifying the tax rules applicable to carried interest earned by individuals managing AIFs. The overhaul modernises the 2013 framework to provide stronger legal certainty and better reflect current market practice. Aligned with the 2023 – 2028 coalition agreement’s goal of reinforcing Luxembourg…