Good evening,
I’m a student resident in Luxembourg with no employment income.
From what I understand, short-term capital gains on shares (held < 6 months) are taxable in Luxembourg, but they are taxed at the personal income tax rate, not a flat capital gains tax.
If I have:
• no salar-y or other income,
• only 2–3 trades per year,
• total short-term gains of around 2,000–6,000 € per year,
then after the ~500 € exemption, the remaining amount would still fall below the tax-free basic allowance of 12,438 € (tax class 1), meaning the effective tax rate would be 0%.
So even though the gains are technically taxable, no actual tax would be due, as long as total taxable income stays below that threshold.
Is this understanding correct?
And just to confirm: there is no “cliff”, right? If you exceed the tax-free amount slightly, only the part above it is taxed, not the entire gain.
Thanks a lot for any confirmation or corrections but please don‘t tell me stuff like just hold it for 6 month. I just want to know if it is possible as long as I have no other income.
I checked the Numbers on https://www.csl.lu/de/ihre-rechte/lohnbesteuerung/die-einkommenssteuer-auf-einen-blick/einkommenssteuertarif/
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Mr_Legit-HD