Whilst tax competitiveness is still present in Luxembourg CEOs’ responses when it comes to business concerns, the measures taken by prime minister Luc Frieden (CSV) have seen that figure drop to just 12% of responses. Photo: Guy Wolff/Archives

Whilst tax competitiveness is still present in Luxembourg CEOs’ responses when it comes to business concerns, the measures taken by prime minister Luc Frieden (CSV) have seen that figure drop to just 12% of responses. Photo: Guy Wolff/Archives

Before we can think about redistributing wealth, we have to produce it. To produce it, we need to become more competitive. This is a complex issue in which taxation plays a key role and explains why, as soon as he took office, prime minister Luc Frieden emphasised his desire to put competitiveness back at the top of the agenda. What do the Luxembourg CEOs questioned in PWC’s CEO survey, published on Wednesday, have to say about this?

Before the arrival of  (CSV) as prime minister, Luxembourg’s tax competitiveness was the sixth most pressing concern for Luxembourg CEOs in 2023. The previous edition of the PWC CEO Survey found that 46% of CEOs cited it as a business concern. It was far behind rising costs, staffing issues or regulatory compliance, but still present. In the 28th edition of PWC’s survey, published on 2 April 2025, tax competitiveness has become the fifth most important issue for financial sector executives (who make up two-thirds of the 81 respondents), and the sixth most important issue for representatives of other sectors.

That might not seem spectacular, but the real difference lies in the percentage. Only 12% of CEOs now cite tax competitiveness as a concern, even though the small sample size makes it difficult to draw very broad conclusions.

The CEOs surveyed give credit to:

—A package of tax relief measures aimed at attracting skilled foreign workers. This impatriation scheme has helped to strengthen Luxembourg’s tax competitiveness.

—Exemption from the “subscription tax” for actively managed exchange-traded funds from 1 January 2025. This reform is seen as strategically positioning Luxembourg in relation to other financial centres, especially vis-à-vis Ireland.

—The introduction of an 18% investment tax credit for investment and capital expenditure in digital transformation and climate transition, approved as part of an amendment to Luxembourg’s income tax law (LITL), has also helped to improve tax competitiveness.

—The effective tax rate for companies earning more than €200,000 in taxable income has been reduced from 24.94% in 2024 to 23.87% in 2025.

The CEOs also welcome the improved dialogue between businesses and regulators, which has played an important role in shaping these reforms and fostering a regulatory environment more conducive to economic resilience and competitiveness.

“For businesses, these reforms should lead to higher profits due to reduced tax pressures, greater flexibility in resource allocation and operations, and the potential for more diversified revenue streams by reinvesting savings in avenues of growth and development.” What’s more is that for the financial sector, these reforms should foster competition and stimulate consolidation as firms seek economies of scale.

Finally, say the Luxembourg CEOs surveyed, this will promote “the creation of more opportunities for market growth and expansion, possibly in ESG-aligned investments, whilst strengthening Luxembourg’s international attractiveness as a financial centre.”

“These changes should position the financial sector for long-term expansion and resilience in a rapidly evolving global market.”

This article was originally published in .

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