An SPF is exempt from corporate income tax, municipal business tax and wealth tax.
An SPF is subject to an annual registration tax (taxe d’abonnement) at the rate of 0.25%, subject to a minimum of 100 EUR and a maximum of 125,000 EUR. The tax base is the amount of the paid-up capital plus any existing share premiums. The portion of debts that exceeds eight times the amount of the paid-up capital and the share premium is also included in the tax base for the registration tax.
Distribution of dividends by an SPF to its shareholders is exempt from withholding tax at source in Luxembourg regardless of tax residency of individual shareholder. Dividends paid to Luxembourg shareholders (individuals) will be fully taxed when they are received and may not benefit from the 50% exemption defined in article 115/15a of the Luxembourg Law on Taxation of Income, given the subjective exemption granted to the SPF. Interest paid by an SPF on its debts towards individuals are subject either to the final 10% withholding tax for individuals resident in Luxembourg or subject to withholding tax under the provisions of the “Savings Directive” for EU resident individuals.