Explore Luxembourg’s dividend withholding tax rates, opportunities for relief under double tax treaties, and the practical steps and deadlines for reclaiming excess tax withheld. 

Luxembourg levies withholding tax (WHT) on dividends paid by Luxembourg-resident companies. While the domestic framework is relatively straightforward, reclaiming excess WHT can still be demanding in practice. Investors must understand when relief is available at source, when a refund is required, and how to navigate Luxembourg’s documentation standards and statute of limitations. 

Understanding Luxembourg’s dividend withholding tax framework 

Under Luxembourg domestic law, dividends paid by Luxembourg-resident companies are, in principle, subject to a 15% withholding tax. This rate applies to both domestic and cross-border dividend distributions unless a specific exemption or reduced rate applies.  

Because many of Luxembourg’s tax treaties set a treaty rate equal to 15%, refund scenarios mostly arise in exceptional cases, such as certain pension funds or other institutional investors that may qualify for a 0% rate or exemption under an applicable treaty.  

How double tax treaties reduce Luxembourg’s dividend withholding tax 

Luxembourg has signed an extensive network of double tax treaties that can reduce or eliminate dividend WHT for non-resident investors. These treaties determine whether an investor is entitled to a lower rate or full exemption, and whether relief is granted via: 

1. Relief at source, or 

2. Reclaim after payment. 

Luxembourg’s treaties frequently set the dividend rate at 15%, matching the domestic rate. However, some investors may enjoy a 0% treaty rate, creating a clear reclaim opportunity if domestic WHT has been applied in full.  

1. Relief at source 

Where the conditions are clearly met and the payer has all necessary documentation, exemption or reduction at source is often possible. In that case, the Luxembourg payer applies the reduced treaty rate directly when paying the dividend, avoiding excess WHT. 

To secure relief at source in practice, non-resident investors generally need to: 

• Provide a certificate of tax residence issued by their home-country tax authority; 

• Confirm beneficial ownership of the dividends; 

• Where relevant, supply any treaty-specific declarations or forms required by the payer or local intermediaries. 

If the payer is not satisfied with the documentation or considers treaty eligibility uncertain, they may still apply the full 15% domestic rate, pushing the investor into a reclaim scenario instead.  

2. Reclaim after payment 

If the full 15% WHT has already been withheld, eligible investors may reclaim Luxembourg dividend WHT by filing a refund request with the Luxembourg tax authorities (Administration des Contributions Directes – ACD). 

For dividends, the core mechanism is Form 901bis, which is used to request a refund of Luxembourg WHT in the limited situations where a treaty or specific rule entitles the investor to partial or full relief.  

In these cases, the reclaim mechanism allows investors to recover the difference between: 

• The 15% domestic rate applied at payment, and 

• The treaty rate (often 0% for qualifying investors such as certain pension funds or other exempt institutional investors). 

Eligibility and key conditions 

The availability and level of relief depend on the specific treaty applicable to the investor’s country (or territory) of residence and the status of the investor (individual, corporate, pension fund, collective investment vehicle, etc.). 

Typical eligibility criteria include: 

1. Tax residence in a treaty partner jurisdiction 
   The claimant must be a resident of a state that has a tax treaty with Luxembourg, as evidenced by a tax residence certificate. 

2. Beneficial ownership of the dividends 
   The claimant should be the economic owner of the dividend income — not a mere conduit or nominee. This aligns with how other EU states (including France) assess beneficial ownership for treaty benefits.  

3. Objective comparability and special statuses 
   For some categories of investors like pension funds, the applicable treaty may require that the entity be comparable to a domestic exempt entity or meet specific regulatory criteria in its home jurisdiction. 

4. Compliance with procedural requirements 
   The investor must use the correct form (Form 901bis), provide all supporting documentation, and file the reclaim within the statute of limitations. 

The UK–Luxembourg treaty: extended opportunities for investment vehicles 

The Protocol to the UK–Luxembourg tax treaty, signed on 7 June 2022, introduces an important clarification that is particularly relevant for Luxembourg investment vehicles investing into the UK.  

Key features include: 

• Extended definition of “resident” 
  Article 2 of the Protocol extends “resident” to include certain Luxembourg investment vehicles set up in the form of a body corporate for tax purposes. 

• 75% equivalent-beneficiary test 
  To qualify as a resident under this extended definition, at least 75% of the beneficial interests in the vehicle must be held by “equivalent beneficiaries” – essentially investors who, if they held the income directly, would be entitled to an equally favorable or better treaty rate under their own treaty with the UK.  

• Collective investment vehicles (CIVs) 
  The treaty text clarifies that collective investment vehicles (CIVs) include UCITS, RAIFs, SIFs and other comparable funds or arrangements established in Luxembourg that the competent authorities agree to treat as CIVs. 

• Dividend treatment 
  For qualifying CIVs, the treaty offers full exemption from UK WHT on dividends, provided the CIV is the beneficial owner of the payment. An exception applies to dividends paid out of income from immovable property, which remain outside this exemption.  

This does not directly change Luxembourg domestic WHT on outbound dividends, but it can significantly improve the overall withholding position of Luxembourg-based vehicles in a UK–Luxembourg investment chain and may influence how investors structure their reclaim strategies across both jurisdictions.

Filing process for Luxembourg dividend withholding tax reclaims 

Compared to France, Luxembourg’s reclaim framework is shorter in law but high in formality. For dividends, the basic reclaim process is: 

1 - Determine the legal basis 
Identify whether the reclaim relies on: 

• A treaty provision offering a reduced or 0% rate; or 

• A possible correction of over-withholding under domestic law (less common for dividends). 

2 - Obtain tax residency certification 
The investor obtains a certificate of tax residence from their home-country tax authority, confirming residence for the relevant tax year(s). 

3 - Complete Form 901bis 

• Provide details of the dividend payments, including dates, gross amounts, and WHT withheld; 

• Indicate the treaty article and rate being invoked; 

• Specify the refund amount requested.  

• Print them double sided (“recto verso”) and have them signed and stamped by the tax authorities in the claimant’s country of residence. 

4 - Attach supporting documentation 
Common attachments include: 

• Tax residence certificate; 

• Proof of beneficial ownership; 

• Dividend vouchers or statements from intermediaries; 

• Bank statements showing actual receipt of dividends; 

• Power of attorney if the claim is filed by an agent. 

5 - Submit the reclaim to the Luxembourg tax authorities 
The claim is filed with the Administration des Contributions Directes. While Luxembourg has expanded mandatory electronic filing for certain withholding tax returns (notably on directors’ fees and employment income), these reforms do not extend to dividend withholding tax. Form 901bis and supporting documentation must still generally be submitted in paper format.  

It is important to note that there is more than one office for filing reclaims and reclaims should be filed with the office under which the dividend paying company resides based on its office address. For example, reclaims in relation to dividends from Arcellor Mittal should be submitted with Bureau Sociétés 1, whereas reclaims in relation to dividends from Eurofins Scientific should be submitted with Bureau Sociétés 2.  

6 - Respond to follow-up questions 
The tax administration may request additional documentation, particularly around beneficial ownership, and investor classification (for example, proving pension-fund status or CIV equivalence). Timely and consistent responses are crucial to avoid rejection or delays. 

Statute of limitations 

Luxembourg applies a relatively tight statute of limitations to dividend WHT reclaims: 

• In general, a claim must be filed within 1 year after the end of the year in which the dividend was received.  

• However, the applicable double tax treaty may prescribe a different timeframe, which can extend or otherwise modify the domestic limitation period. In those cases, the treaty time limit prevails for treaty-based reclaims. 

Because the 1-year rule is strict, investors should: 

• Implement processes to identify reclaimable dividends quickly; 

• Coordinate with local advisors and custodians to ensure timely collection of documentation; 

• Monitor treaty-specific deadlines to avoid missing longer or shorter treaty windows. 

EU and legislative developments shaping Luxembourg’s reclaim landscape 

While Luxembourg has not seen the same volume of domestic litigation as France on dividend WHT, recent EU-level and domestic developments still influence reclaim strategies: 

• EU case law and non-discrimination principles 
  Decisions of the Court of Justice of the European Union (CJEU) on dividend WHT and free movement of capital continue to reinforce the idea that foreign investors, including pension funds and CIVs, must not be treated less favorably than comparable domestic entities. These principles may support Luxembourg-related reclaims in other Member States (where a Luxembourg entity is the claimant) and shape how Luxembourg interprets objective comparability. 

• 2024–2025 Luxembourg tax package and e-filing reforms 
  Recent amendments to the Luxembourg Income Tax Law and the roll-out of mandatory electronic filing for certain withholding tax returns underline a policy shift towards digitized, standardized procedures. However, these electronic-filing obligations currently apply only to specific categories of withholding tax (such as directors’ fees, salaries, and pensions). Dividend withholding tax remains outside the e-filing framework and continues to require paper submission. 

While primarily procedural, these changes increase the emphasis on: 

• Correct form usage; 

• High-quality documentation; 

• Adhering to tight deadlines. 

For non-resident investors and Luxembourg-based vehicles, these developments make process discipline as important as the underlying legal entitlement when pursuing WHT reclaims. 

Navigating Luxembourg’s WHT reclaim landscape 

Compared with some larger jurisdictions, Luxembourg’s domestic dividend WHT regime is simple on paper: a single 15% rate, limited circumstances for refund, and a short statute of limitations. In practice, though, reclaiming excess WHT in Luxembourg still requires: 

• A precise understanding of treaty provisions, especially where a 0% rate is available only to specific investor types (such as pension funds); 

• Careful attention to beneficial ownership and investor classification, particularly for funds and other pooled vehicles; 

• Strict compliance with forms, e-filing requirements, and deadlines in dealings with the Luxembourg tax administration. 

For financial institutions, asset managers, and cross-border investors, success increasingly depends on aligning: 

1. Structure (for example, using qualifying CIVs under the UK–Luxembourg treaty), 

2. Substance (genuine economic ownership and risk), and 

3. Procedure (timely, well-documented filings via the correct channels). 

Working with advisors who combine knowledge of Luxembourg practice, treaty networks, and EU jurisprudence can be essential to unlock the full withholding tax recovery potential in Luxembourg.