Since 01/01/2017, All self-employed people with a yearly turnover of more than EUR 100,000 should have an accrual accounting system. Below EUR 100,000 of yearly turnover and if you offer intellectual services, like consulting, you can have a cash basis accounting system.
In Luxembourg you have 7 month after the end of the financial year to publish company’s accounts. After that the RCSL (Luxemburgish business register) will fine you for late filing. The fine is equal to:
So if you publish your aaccounts for the financial year 31/12/2016 on the 01/12/2017, you will have to pay a fine of EUR 500 excl. VAT.
Make a list of benefits of being self-employed in Luxembourg rather than in another European country is obviously very subjective! But we can make a non-exhaustive list.
You must first know that thanks to the freedom to provide services, under certain conditions, you can conduct your business from Luxembourg to all over Europe.
Second, contrary to what is said in the press, Luxembourg is certainly not a tax haven. From a tax point of view, the tax scales are very close to those in France or Belgium. However, there are some interesting provisions!
Contrary to what one might think the main advantages for the self-employed located in Luxembourg are not fiscal but social. Indeed, the social contribution rates are often lower than in other countries. Thus, social contributions are equivalent to about 26-27% of taxable income (against 48.07% in Belgium).
On the other hand, and contrary to many other countries, social the social cover of the self-employed Luxembourg is very close the employee’s one:
The official date for the submission of tax returns for individuals is 31 March. However, if you do not have to file one, the administration accepts delivery of tax returns till 31 December.
If businesses, including very small businesses do not have the obligation to entrust their bookkeeping to a registered accountant, working with an expert partner in the accounting, financial, social and tax aspects of your professional and personal environment is nevertheless highly recommended.
A registered accountant informs on the company’s situation
The registered accountant does not only do the bookkeeping and presenting the financial statements. We are able to give you clear image of the business financial situation.
The registered accountant helps you to take the right decisions
As, entrepreneur, you are constantly required to make choices. If some decisions have limited consequences, other may be strategic and complex:
Below is a small list of the strategic decisions to take when starting a business:
As part of business development topics requiring sound advice might be:
The decision support tools (projected balance sheet, various simulations …) proposed by the registered accountant, but also the information from its diverse experience and situation analysis are often good advice.
The figures and studies on this subject show that the support of a registered accountant to small businesses increases their lifetime.
The registered accountant allows the entrepreneur to concentrate on his business:
When a manager outsources its accounting to a registered accountant, he has more time to focus on his business.
Our mission can be very broad and include the management of legal, accounting, tax and social security declarations.
These time consuming tasks do not allow you to work on tasks that you cannot delegate (management, marketing, purchase, trade negotiation,).
The registered accountant brings you peace of mind.
Outsourcing your accounting to us will bring you peace of mind about the quality of your books and tax declarations. Moreover, in case of error on our part, you will benefit from our insurance.
We also guide you through the administrative maze !
The official date for the submission of tax returns for individuals is 31 March. However, if you do not have to file one, the administration accepts delivery of tax returns till 31 December.
The tax administration is conducting tax reassessment on several dozen contractors which were employed through umbrella companies.
Indeed some umbrella companies in Luxembourg have organized a tax fraud scheme by which the major parts of the amounts paid to the consultants were not declared to the tax authorities. Contractors, in good faith, thus find themselves having to pay for important additional amounts of taxes and social contributions.
To recap, the portage in Luxembourg is not allowed. Moreover, given the good social protection of self-employed in Luxembourg, there is no major interest in being employed rather than self-employed. Indeed, the self-employed in the same way as the employee can benefit from sick leave and unemployment benefits.
Finally the costs relating to the accountancy is well below the management fees fees that may charge umbrella companies.
Finally in terms of professional liability, there are legal solutions which enable you to be protected.
If you want, as contractor, to switch from the status of employee to self-employed, do not hesitate to contact us. We can handle everything!
from the status of employee to self-employed, do not hesitate to contact us. We can handle everything!