practical Guide to settLinG in the Grand duchy of luxembourG

wealth manaGement

table of contents

01page04

the family home

info – internet sitesbuying

tax credit for main residenceVat on property

02page08

settling in luxembourgadministratiVe steps

at the communedeclaration of arrival the tax cardparking permit in residential areas registering your dog

registering your Vehicle What to doyour driving licence

registering With the embassy of your country of origin

03page14

social security

health insurancecompulsory health insurance optional supplementary health insurance

pension insurance

our estate planning department is available to provide you with all the details you may want. our experts can analyse your financial situation and let you know what implications luxembourg law may have on it, both from a civil (matrimonial regime, wills) and tax (allocation and structuring of your wealth) point of view. they can also put you in contact with local professionals (notaries, estate agents, accountants, insurers ...) and guide you through the steps to follow when settling in the grand duchy.

practical Guide to settlinG in the Grand duchy of luxembourG

are you intendinG to move to luxembourG and settle there ? here

is some adVice to help you.

We haVe Written this brochure in line With the steps to be folloWed,

beginning With the assumption that you are currently liVing in a

country near luxembourg and that you haVe decided to transfer

your residence there.

you Will haVe to find accommodation and probably buy it and then

folloW the Various administratiVe steps to settling in luxembourg

and liVing there on a daily basis.

there are also many social benefits in daily life, Which We also

describe.

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01info – internet sites

if you have decided to move to the grand duchy of luxembourg and are looking for long-term accommodation, we recommend that you make an appointment with an estate agent. the estate agents can suggest property to rent or to buy. small ads for property to rent or buy can be found in lux-bazar, the luxemburger Wort, point 24, lux-post Weekend and in l’essentiel.

buyinG

real-estate transactions in the grand duchy of luxembourg are subject to a registration fee of 7% (a proportional fee of 6%, plus a stamp duty of 1%), unless it is a sale of property to be built, subject to Vat (see below).

tax credit for main residence

a specific law stipulates that any resident in luxembourg, when registering a notarial act for the acquisition of a personal residence, may benefit from a tax credit of a maximum of € 20.000 (double in the case of joint acquisition by both spouses) on the registration fees and stamp duty normally due.

the family home

Æ www.athome.lu Æ www.habiter.lu Æ www.immofinder.lu

Æ www.immostar.lu Æ www.advanceimmoblier.lu Æ www.wort.lu

some real-estate websites:

to find out about the tax aspects of acquiring a property you can look at www.aed.public.lu.

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this means that in the case of joint acquisition of a property, the registration fee may be reduced by up to € 40.000. the administration will however in all cases make a minimum charge of € 100 for registration fees.

people not yet living in luxembourg, but who intend to settle there, will not receive the tax reduction stipulated by law immediately. the reduction will only be applied once the property is actually occupied. to get this refund, the buyer must send a written request to the competent tax office, together with a residence certificate.

if the deadline or period for living in the property is not met, the reduction granted for the transaction in question will have to be repaid, together with legal interest from the day on which the reduction was granted.

the granting of a tax credit is subject to the following conditions (it is essential that they are indicated in the notarial act)

Æ you must live in the acquired property yourself, within a period of two years (four years in the case of a building plot or a property under construction) and for a period of two years (except in the case of force majeure, by means of exemption from the head of the land registration department, such

as illness of the buyer making occupation of the property impossible, duly certified by a medical certificate, or the death of the spouse or divorce or the dissolving of a legal partnership

Æ the property may not be rented out or used for other purposes for two years.

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after two years’ occupation, the buyers are free to sell their property, since the tax credit has become final. to obtain a new reduction, two conditions in particular must be met: (i) the buyer must still have a tax credit balance and (ii) this new property must be lived in personally.

vat on property

to stimulate property construction, the luxembourg state applies an extra-low rate of 3% to the construction and renovation of a property provided that it will used as a main residence, either directly by himself, or indirectly by a third party (tenant).

the buyer, who pays a vat rate of 3 % may either pay 15% Vat and be refunded 12%, or pay immediately the rate of 3 % after the developer responsible for the work has sent the request to the land registration and estates department for approval.

any right to a Vat refund lapses after 5 years dating from 31 december of the calendar year to which the tax to be refunded relates. the request must be for an amount in excess of € 3.000 before Vat and cover a minimum period of 6 months. the amount reimbursed may not exceed € 60.000 per property constructed and/or renovated.

Æ for buying construction materials (when the owner carries out the work himself)

Æ for the sale of new properties not yet allocated and for sales contracts for properties to be built insofar as they relate to constructions built when the contract is signed

Æ for invoices of less than € 3.000 excluding tax

Æ if the effective allocation of the property has not yet been established during construction or renovation of the property.

this procedure for refunding the difference in vat is however applicable

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all requests, on the appropriate forms, must be sent to :

if, in the two years following the end of the work, the property is used for other purposes than a main residence, the tax advantage must be completely repaid with interest at the legal rate from the date it was granted.

the extra-low rate of 3% applies both to the construction and the renovation of a property. renovation of property includes

Æ major improvement works carried out following the acquisition of a property. this work must be finished within 5 years of the acquisition of the property which must have been built least 20 years ago.

Æ major improvement works to a property built at least 20 years before the work begins. this work must be finished two years from its start date.

administration de l’enreGistrement et des domaines

bureau d’imposition xii

address

telephone

remboursement tVa-logement

(+352) 4490 5319

7, rue du plébiscite, bp 31, l-2010 luxembourg

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02administrative steps to settlinG in luxembourG

at the commune

nb: do not forget to remove yourself from the population register in your country of origin so as to avoid being registered in two countries. continuing to be registered in your country of origin may constitute a presumption of continued domicile in that country.

declaration of arrival

every person who takes up residence in a luxembourg commune must make a "declaration of arrival" at the commune within 8 days. at your request the commune can provide you with a certificate of residence (useful for your employer or for registering your vehicle).

Within 3 months you should make a “statement of registration” on the basis of which you will receive a “registration certificate”. the same applies to all members of your family. .

Æ valid identification card (or a passport)

Æ civil status documents (family register, marriage certificate or civil partnership certificate, children’s birth certificate, decree of divorce if appropriate)

Æ or employees, a work contract

Æ for the self-employed, residence permit or equivalent

Æ for those not working or retired (to avoid becoming a burden to the luxembourg welfare system), proof of adequate resources, equivalent to the guaranteed minimum income and proof of existing medical insurance

Æ proof that you are no longer registered in the commune you have left.

to make this declaration, you must have the following documents, originals or certified copies:

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each commune may ask for further documents. usually you can find details of this on the commune’s website.

to help you search, the luxembourg state has set up a general website called "www.guichet.lu" where you can find detailed information and where you can download the forms you need and even carry out some administrative procedures online.

if you are moving to luxembourg-city, you can look at its own website "www.vdl.lu".

you can also go to the central administration office, the bierger-center. no appointment is necessary.

if the documents are not in french, german or english they will have to be translated by a sworn translator.

after 5 years uninterrupted residence in luxembourg, you can obtain a “permanent residence permit”.

bierGer-center (luxembourG-ville)

address

telephonefax

email

26a, boulevard royal, l-2449 luxembourg

bierger-center@vdl.lu

(+352) 4796 2200(+352) 2627 0999

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tax card

as an employee working in the grand duchy of luxembourg or a pensioner taxable in luxembourg, you must have a tax card. the information given on this card is a determining factor for establishing the rate of withholding tax to be applied to payments made under a contract of employment and pensions paid by a luxembourg pension fund and to fix social security contributions.

if you are working in luxembourg for the first time you must request a tax card in person from your local commune. once you have received the card you should give it to your employer or the luxembourg pension fund.

persons not receiving any professional income (salary or pension) in luxembourg will have to contact the tax office in order to determine their tax situation.

parkinG permit for residential zones

for the regulated parking zones where you have to pay in the various communes in the country, the parking permit entitles you to free, unlimited parking in the sector of your local commune.

each commune determines, by municipal ordinance, the residential parking zones and the conditions for granting residential parking permits and how they work.

to get a parking permit you must live in a residential parking sector, be registered with the commune and be the owner or registered keeper of one or more vehicles. the residential parking permit is subject to an annual fee which varies from one commune to another.

administration des contributions directes bureau d’imposition rts luxembourG 2

address

telephonefax

internet

18, rue du fort Wedell, l-2982 luxembourg

www.impotsdirects.public.lu

(+352) 40 800-1(+352) 44 800-3300

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reGisterinG your doG

to improve the control and identification of dogs and oblige their owners to respect certain security measures, legislation requires the following: - the electronic identification of the dog by a certified

veterinary surgeon;- the registration of the dog with the local commune,

indicating its breed and an anti-rabies vaccination certificate;

- the payment of an annual fee.

certain communes also require a copy of your civil liability insurance policy.

reGisterinG your vehicle

When settling in luxembourg, you are obliged to register your vehicle with the société nationale de contrôle technique (snct) (national roadworthiness test centre) as soon as possible after your arrival and at the latest 6 months after the date of your declaration of arrival in the commune where you live.

the snct has three different sites: sandweiler, esch-sur-alzette, wilwerwiltz.

Æ residence certificate

Æ social security number

Æ eu certificate of conformity (provided by the vehicle’s manufacturer)

Æ the original invoice for the vehicle

Æ original car registration document

Æ a € 50 tax stamp “droit de chancellerie”

make sure you have the following documents when registering:

société nationale de contrôle technique - snct

address

telephone

internet

11, rue de luxembourg, l-5230 sandweiler

www.snct.lu

(+352) 35 72 14 - 1

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what to do

Clear your vehiCle through Customs

if it is imported

request registration

number and plate

from the snCt

request a green Card

buy the tax stamp

request a registration Card from

the snCt

roadworthiness test

to import the vehicle and receive a vignette 705, the new arrival should present himself and his vehicle at a customs and excise office (the vignette 705 is a document issued by customs and excise showing that the vehicle to be registered is compliant with the tax legislation).

the Vat system varies depending on whether the vehicle is new or used.

the registration number is allocated on the basis of a request with the requestor’s social security number. once this number has been allocated, the production of the registration plate is authorised. a message confirming the authorisation of the production of this plate with this number is then sent to the approved makers of registration plates.

it is possible to make your request by letter sent to the snct, by telephone, fax or even by e-mail. it is also possible to have a personalised number plate.

your vehicle must be insured with the insurance company of your choice provided that it is approved in luxembourg.

a tax stamp of € 50 must be affixed to the vehicle transaction request form. the tax stamp can be bought from the customs and excise and the three snct branches.

once you have done this, the registration request must be made on a vehicle transaction request form, largely filled in using the information on the eu certificate of conformity provided by the vehicle manufacturer. the owner of the vehicle should present his id card.

When moving to luxembourg from abroad, the registration procedure must be followed by a roadworthiness test of the vehicle.

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your drivinG licence

if you come from a country neighbouring luxembourg, and you have taken up residence in the grand duchy you must register your driving licence in the grand duchy of luxembourg. you may exchange it for a luxembourg driving licence at any time.

by registering their licences, people living in the grand duchy of luxembourg are warned when their licences run out. likewise, they can quickly obtain a copy of the licence if it is lost, stolen or damaged: in this case the national roadworthiness test centre (snct) will provide the copy. this can only be done if the existence and data of the foreign driving licence are known. if these data are not registered, it will have to wait for proof from the competent foreign licensing authority of the existence and conditions of validity of the lost or stolen licence. this will slow don the procedure for the person wishing to get back a document which proves his right to drive as soon as possible.

the holder of a driving licence from the european economic area is should, on arrival, hand in a copy of both sides of his driving licence to the commune where he lives. the latter will then forward this to the licensing centre of the snct for registration. this service will inform the person concerned in writing once the registration has been made.

the holder of a driving licence may also go to the snct personally to register his driving licence.

reGistration with the embassy of your country of oriGin

it is recommended that you register with the embassy of your country of origin

Æ for the delivery or renewal of official documents (passport, national identity card)

Æ in the case of death, serious accident, notarial act or arrest, the consulate or embassy can come to your aid and help with administrative formalities

Æ to enrol on an electoral register in your country of origin.

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03social security

health insurance

there are two types of health insurance in luxembourg: compulsory health insurance and optional complementary health insurance.

compulsory health insurance covers most basic medical services.

optional complementary health insurance allows you to benefit from wider insurance cover, in particular with regard to hospitalisation costs, outpatient treatment or dental care.

how to take out compulsory medical insurance

to benefit from compulsory health insurance cover, you have to be registered with the caisse nationale de santé (luxembourg national health fund) (cns, see opposite). once registered, you will receive a social security card which will identify you in your dealings with the social security bodies in luxembourg and the provision of benefits (doctors, hospitals, chemists….). the benefits concern mainly medical cover, maternity, invalidity, accidents at work, occupational disease, family credits, unemployment and dependency insurance.

optional complementary health insurance

compulsory health insurance covers most medical services. however, if you want to benefit from wider protection (hospitalisation costs, outpatient treatment or dental care), you can take out an optional complementary health insurance.

the caisse médico-chirugicale mutualiste (medical-surgical mutal fund) (www.cmcm.lu) offers this type of insurance.

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03

pension insurance

if you are receiving a legal pension in your country of origin (which is an eu country), you can ask to have it paid directly into your account in luxembourg. all you need to do is ask you pension office in your country of origin.

voluntary pension insurance

if you have not yet reached pensionable age in your country of residence when you move and you want to continue to pay contributions in luxembourg, you can take out a voluntary assurance pension insurance.

all requests must be made to the Joint social security centre(www.ccss.lu).

Æ if you are still working professionally in your country of origin (which is an eu country), you must request an e106 form from the national health fund of your country of origin. this form must be sent to the luxembourg national health fund so that you will also be covered in the grand duchy.

Æ if you have retired from work and are a pensioner in your country of origin (which is an eu country), you will remain covered by the social security system in your country of origin. to be covered in luxembourg as well you have to request the e121 form from the pension service in your country of origin and send it to the luxembourg national health fund.

Æ if you have never worked, the insurance is optional.

(i) if you are covered by insurance in your country of origin you must request the e121 form from the health service in your country of origin and present it to the caisse nationale de santé to be covered in the grand duchy.

(ii) if you are not affiliated in your country of origin, you can request affiliation to the caisse nationale de santé yourself. this voluntary insurance will enable you to benefit from the same health cover as under the compulsory scheme.

how you become affiliated depends on your status when you arrive:

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head officebouleVard royal, 43l-2955 luxembourg

t +352 4797 1www.kbl.lu

amsterdam brussels

geneVa london

luxembourg madrid

monaco munich

paris

08.2

012