Q4 2026 tax advances: what a Luxembourg holding company pays on 10 November and 10 December

On 10 November 2026, a Luxembourg company pays its fourth advance of municipal business tax and its fourth advance of net wealth tax. On 10 December, it pays its fourth advance of corporate income tax. These two dates close the 2026 tax year. The amounts do not depend on the 2026 result: they depend on the most recent assessment issued by the Administration des contributions directes (ACD), Luxembourg's direct tax authority.

For a holding company whose result swings from one year to the next (a disposal, non-exempt dividends, a provision release), the gap between what is called and what will be due can reach several hundred thousand euros, in either direction. That gap is often discovered when the assessment arrives, although it could have been measured as early as October — and that is exactly what doo.FINANCE builds into its clients' financial steering. Here is how Luxembourg tax advances work, what they represent at the end of 2026, and what a finance director can still do before the deadlines.

Tax advances in Luxembourg: three taxes, two calendars

A resident company pays quarterly advances, over the tax year, on three taxes that are later assessed. Their calendars do not coincide, and this is the first source of error in a cash plan:

IRC comes with the employment fund surcharge (fonds pour l'emploi), set at 7% of IRC: it follows IRC and its due dates.

The ACD tax calendar describes the 10 November and 10 December payments as those of "tax year N". For 2026, these are therefore the last instalments on the current year, not a 2025 balance.

How the amount is set, and why it can be wrong

According to the ACD, each advance is set "in principle, at one quarter of the tax which, after crediting withholding taxes, results from the most recently issued assessment". Two consequences follow.

The reference year is not 2026

The most recently issued assessment is the last notice received. Depending on the tax office's progress, it may relate to 2024, or to an even earlier year. 2026 advances therefore reflect that year's result, at that year's rates.

The rates have in fact changed. Since tax year 2025, IRC is 16% above €200,000 of taxable income (14% up to €175,000, with a transition band in between). It was 17% from 2019 to 2024. For a company established in Luxembourg City, the nominal combined rate of IRC, ICC and employment fund surcharge thus falls from 24.94% to 23.87%. An advance based on a 2024 assessment carries the old rate.

The reference year's result is not 2026's

This second effect weighs more. A holding company that realised a taxable capital gain in 2024 and only earns recurring income in 2026 pays 2026 advances calibrated on an exceptional year. The reverse also happens: a very profitable 2026, with advances based on a lean year, builds up a large balance payable on assessment.

The ACD provides for this: the amount "is modified, either upon a reasoned request from the taxpayer, or ex officio" when the authority holds information justifying a reduction or an increase. Adjustment therefore works both ways. The gap still has to be measured first.

A worked example: the holding company that sold in 2024

Take a SOPARFI with its registered office in Luxembourg City. Its last assessment relates to 2024, with taxable income of €1,200,000 driven by a non-exempt capital gain on a disposal. For 2026, its forecast result is €400,000. The example is simplified: ICC base identical to the IRC base, no allowance, no credit or tax relief.

What the 2024 assessment calls in 2026:

• IRC 2024: 17% × €1,200,000 = €204,000, plus the employment fund surcharge (7%): €14,280, i.e. €218,280 in total, so €54,570 per quarter;
• ICC 2024: 6.75% × €1,200,000 = €81,000, i.e. €20,250 per quarter.

What will actually be due for 2026:

• IRC 2026: 16% × €400,000 = €64,000, plus the employment fund surcharge: €4,480, i.e. €68,480;
• ICC 2026: 6.75% × €400,000 = €27,000.

The total 2026 charge (€95,480) does correspond to 23.87% of taxable income. But if all four advances are paid as called, the company will have paid €299,280 for a tax of €95,480. It will therefore have tied up €203,800 until the 2026 assessment, which will not be issued before 2027 at the earliest.

At this point in the year, three ICC advances and three IRC advances have already gone out. Even if the last two were reduced to zero, the overpayment would remain €95,230 on IRC and €33,750 on ICC. What is still in play are the last two payments: €74,820.

The reverse case. With the same 2024 assessment and 2026 taxable income of €3,000,000, 2026 tax would reach €513,600 of IRC (employment fund surcharge included) and €202,500 of ICC. The advances cover only €299,280 of it. The balance of €416,820 will be payable on assessment. It bears no interest until the assessment falls due, but it must sit in the forecast, and an ex officio increase of the advances remains possible if the ACD holds the information.

Net wealth tax: the line that gets forgotten

The 10 November advance also includes net wealth tax, which follows a different logic. It is 0.5% of taxable net wealth up to €500 million. For a holding company whose assets are mainly financial, the minimum often applies. Since tax year 2025, the minimum net wealth tax for resident taxpayers is:

• €535 when total assets are less than or equal to €350,000;
• €1,605 between €350,000 and €2,000,000;
• €4,815 above €2,000,000.

This minimum is reduced by the IRC, employment fund surcharge included, due for the preceding tax year. A holding company that paid significant IRC the previous year may therefore see its minimum neutralised, then the effect reverse the following year. The mechanism is the same as for IRC: the advance called reflects a past situation, and its relevance is checked, not assumed.

What a finance director should have done before 10 November

The work comes down to four steps, and none requires waiting for the year-end close.

1. Identify the reference year. Note on the latest advance notice the tax year it derives from. If it is 2024 or earlier, the rate gap is a given, and the result gap remains to be measured.

2. Project 2026 taxable income. This is not the accounting result: start from the estimated year-end result, then apply a holding company's usual tax adjustments (exemption of dividends and gains on qualifying participations, the ATAD interest limitation rule on borrowing costs, available loss carry-forwards). A projection within ±10% is enough to decide.

3. Calculate the gap per tax. IRC plus employment fund surcharge on one side, ICC on the other (at the municipal rate of the registered office), net wealth tax separately. Compare the sum of the four advances called with projected 2026 tax. The gap that matters in the short term is not the annual gap but what remains to be paid: the 4th ICC and net wealth tax advance on 10 November, the 4th IRC advance on 10 December.

4. Decide. Three options:

• request an adjustment from the competent tax office, with a reasoned, quantified request accompanied by the projection. The ACD publishes no processing time: nothing guarantees a decision before 10 November, and as long as the amount has not been modified, the amount on the notice is the one payable. 10 December remains more realistic;
• pay and let the balance settle on the 2026 assessment, if the gap is small or cash allows;
• provide for the catch-up in the 2027 forecast, if the gap runs the other way.

What you should not do is reduce a payment on your own initiative. Full-rate late-payment interest of 0.6% per month applies, according to the ACD, "also in the case of non-payment of a tax advance at its due date".

Why these gaps are discovered too late

The difficulty is rarely a tax one. It is organisational: ACD deadlines live in a diary or in the accountant's head, and the cash forecast lives in a spreadsheet that nobody reconciles with the assessment notices. On the 8th of the month, someone notices the amount, and it is too late to discuss it.

In a multi-entity structure, the effect multiplies: each company has its own notice, its own reference year, its own municipal rate, and sometimes a tax unity that reallocates IRC between subsidiaries and the parent. Without financial consolidation maintained continuously, the group's gap can only be read entity by entity, and too late.

How doo.FINANCE helps you steer your tax advances

We treat Luxembourg tax deadlines as predictable cash flows, not as calendar surprises. In practice, within our fractional CFO service:

• each entity's IRC, ICC and net wealth tax advances are built into the cash forecast maintained in Odoo, with their reference year;
• taxable income for the current year is projected every quarter, and the gap with the advances called is quantified before each due date;
• where the gap justifies it, we prepare the reasoned adjustment request and its supporting figures, together with our tax return services.

The result: a finance director who knows in September what will be paid out in November and December, and why.

To review your 2026 advances before the deadlines, contact our Luxembourg team.

Frequently asked questions

Are 2026 advances calculated on the 2025 result?

Not necessarily. The ACD sets each advance at one quarter of the tax resulting from "the most recently issued assessment", that is, the last notice issued. If your last notice relates to 2024 or an earlier year, your 2026 advances derive from it, at that year's rates. Check the year shown on your advance notice before any projection.

Can an advance that has already been called be reduced?

Yes. The ACD provides that an advance is modified upon a reasoned request from the taxpayer, addressed to the competent tax office. The request should be supported by a quantified projection of the current year's taxable income. No processing time is published: until the modification is granted, the amount on the notice remains payable.

What happens if an advance is not paid by its due date?

Full-rate late-payment interest of 0.6% per month may be charged. The ACD states that it also applies to non-payment of an advance. Reducing a payment yourself while awaiting a decision is therefore the wrong option.

Does the 16% rate already apply to 2026 advances?

The 16% rate applies to tax for tax year 2025 and subsequent years. Advances, however, take the tax from the most recently issued assessment: if it relates to 2024, the advance still carries the 17% rate. The gap is regularised on the 2026 assessment, or earlier through an adjustment request.

Does a holding company without commercial activity pay ICC?

A resident capital company is in principle subject to municipal business tax, whose rate depends on the municipality of the registered office: 6.75% of business profit in Luxembourg City according to the ACD's example. The treatment of income from participations follows its own rules, to be examined case by case with your adviser.

This article sets out the general framework applicable to the tax advances of Luxembourg companies as at 4 November 2026. It does not replace an analysis of your situation: the rules applicable to your structure may have specific features, and professional advice is recommended before any decision.