Economy & Politics

Five budget innovations to help businesses

The government’s 2021 budget plan provides for 21.7 billion euros in spending. A sum including measures to support economic activity but also to develop the attractiveness of Luxembourg companies.


The government’s 2021 budget plan provides for 21.7 billion euros in spending. A sum including measures to support economic activity but also to develop the attractiveness of Luxembourg companies.

Luxembourg will become a welfare state even more in 2021. Proof of this is, in the budget proposal tabled by Pierre Gramegna (DP), nearly 48% of the expenditure envisaged by the government would be dedicated to social benefits, subsidies and subsidies in the social domain. But companies have not been forgotten in this “extraordinary budget”, to use the words of the Minister of Finance.

1. / Extended partial unemployment

Already, the Prime Minister has confirmed the extension of access to partial unemployment beyond December 31 for companies in difficulty. In his State of the Nation speech, Xavier Bettel made it clear that there was no question of renouncing “the most important stabilization instrument” at present. It is true that in seven months of more intensive application than ever, the measure has ensured 375,196 salaries (i.e. 807 million euros redistributed). The device has already benefited 14,810 companies in the country.

There is no doubt that without the massive recors for this support, the number of job seekers would greatly exceed its current level. To know : 18,525 unemployed supported by Adem.

2. / A margin for “vulnerable sectors”

Extended deadline, also beyond the end of 2020 until, for the Recovery Fund. This device was specifically created in May to support the sectors in greatest difficulty. The news will relieve coffee shops, tourism players, but also event professionals whose turnover has been at half-mast since the first containment measures. The fund (endowed so far with 200 million euros) will be relaunched until next March 31, “Under the same conditions”.

Still for the benefit of “vulnerable sectors”, Luxembourg could tomorrow launch new direct help. For companies severely affected by the effects of the crisis, the aid would offset part of the costs incurred. A condition is already fixed: that the companies in question have suffered losses of 30% or more of their turnover.

3. / Get started!

Long live the first-time creators! In a Luxembourg that always wants to be innovative and in the spirit of a start-up nation, support for business creation remains a priority. As the economic horizon is far from clear, the State says it is ready to encourage even more those who dare to get started. A new regime will therefore be introduced for company founders next year. No more details for the time being, but the Ministers of the Economy Franz Fayot (LSAP) or the middle classes, Lex Delles (DP), should no longer delay in revealing the outlines of the boost.

4. / Attract talent

Yes, the cost of living is high in the Grand Duchy. Yes, the real estate boom is making access to housing difficult. Yes, car traffic is sometimes a hassle. But yes also, Luxembourg still offers good career prospects. However, it is necessary to convince more foreign employees of the strengths of the small country, even beyond the pool of skills of cross-border workers. Hence the expressed wish of revise the tax regime granted to impatriates, these highly qualified women and men who choose to come and live and work in the country, especially for the financial center.

ILLUSTRATION - Zum Themendienst-Bericht vom 06. Juli 2020: Wer bereits im Vorfeld weiß, dass sein Vorgesetzter einen Konflikt besprechen möchte, kann während der Unterhaltung gelassener bleiben. Photo: Christin Klose / dpa-tmn - Honorarfrei nur für Bezieher des dpa-Themendienstes +++ dpa-Themendienst +++

A study by the Luxembourg Institute of Socio-Economic Research (Liser) shows that the skills for a job are a key element of a country’s competitiveness.

In addition to the tax deductions already fixed by convention to attract and secure these talents, Pierre Gramegna intends to put in place a tax-advantageous impatriation bonus. An advantage that an impatriate can obtain from his employer for a maximum of 8 years.

5. / Primer is to conserve

To attract and keep skills at their service, the government is proposing to establish in companies that so wish the participatory bonus. In this way, an employee could participate, with tax advantages, for the benefit of the company which occupies him.

This time, the Prime Minister has already unveiled the contours of the reform: “This bonus, exempt from taxes up to 50%, would nevertheless be limited. On the one hand, the company cannot pay more than 5% of its profit for this purpose (the company must therefore be profitable and pay taxes). On the other hand, the bonus must not exceed 25% of the employee’s annual salary ”.


Related Articles

Back to top button