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Economy, Money, Banking & Taxes - Luxembourg Apply now for international schools jobs and start teaching abroad with overseas adventure.

Money

Up until recently, Luxembourg used the Luxembourgish Franc which used the currency code LUF, however, today it uses the Euro like many of its other European neighbours. The Euro uses the currency code EUR. 1 Euro is worth about £1.38 or £0.82 and can be subdivided down into 100 Euro Cents.
Coins come in 1, 2, 5, 10, 20 and 50 cent variants as well as 1 and 2 Euro variants.

Bank notes are available in 5, 10, 20, 50, 100, 200 and 500 Euro variants.

Economy

Luxembourg’s economy is built almost solely on the banking, steel, industrial and tourist sectors. Banking has been an especially strong suit and has led to the stereotype of Luxembourg being a tax haven. Today, its total assets in the banking sector are valued at around EUR 1 Trillion (around $1.4 Trillion or £820 Billion).

During the late 19th Century, English metallurgy was introduced into the country and it rapidly became a common practice in the country, especially after the forming of the Arbed Company in the early 20th Century. Today, Steel makes up around 29% of all exports, 22% of industrial employment, 3.9% of the work force and 1.8% of GDP.

Tourism is also a large source of income for the country and makes up around 8.3% of GDP annually whilst incorporating around 11.7% of the workforce. Additional sources of income in the country include the Telecommunications and Agricultural industries.

Banking

Luxembourg behaves identically to its European neighbours as well as the UK and US in the way its banks work. Two main types of accounts are provided to the public including Current and Savings Accounts. Current Accounts allow for easy and quick withdrawal of funds but have low interest rates whilst Savings Accounts provide higher interest rates but normally restrict the amount of uncharged withdrawals allowed by an individual.

ATMs are widespread all across Luxembourg, especially in its cities, and you shouldn’t ever have trouble withdrawing cash in any urban environment.

Taxes

Luxembourg incorporates standard western-style taxes, these include Income Tax, Social Security, Net Worth Tax and Inheritance & Gift Taxes.

All residents of Luxembourg are subject to Income Tax on their worldwide income. Individuals are considered to be residents if their accommodation exceeds six months. It should be mentioned that married individuals are jointly taxable. This can be broken down into Employment Income (scales based on income), Self-Employment & Business Income (scales based on income), Investment Income (taxed at up to 35%), Movable Property (taxed at up to 21.8%), Real Estate (taxed at up to 21.8%). Income Tax rates are as follows:

  • Below EUR 20,000: Individual 0% - Couple 0%
  • Between EUR 20,000 and 40,000: Individual 3.94% - Couple 0%
  • Between EUR 40,001 and 60,000: Individual 16.21% - Couple 4.69%
  • Between EUR 60,001 and 80,000: Individual 24.68% - Couple 10.75%
  • Between EUR 80,001 and 100,000: Individual 28.95% - Couple 16.58%
  • Between EUR 100,001 and 120,000: Individual 31.5% - Couple 21.58%
  • Between EUR 120,001 and 140,000: Individual 33.39% - Couple 24.93%
  • Above EUR 140,000: Individual 34.73% - Couple 27.33%