Transactions in cryptocurrencies
1) Are individuals taxed on gains on the sale of cryptocurrencies?
When an individual acts as an investor, any gain would only be taxed in Luxembourg if it is a speculative gain, i.e. the sale of the cryptocurrency would occur within 6 months of its acquisition and if the total profit is at least €500. In this case, the gain would be subject to the standard rates of individual income tax, up to a maximum of 45.78 per cent. In other cases, the gain would not be taxable in Luxembourg. When an individual acts as a trader, any gains will be liable to the standard individual income tax rates up to a maximum of 45.78 per cent.
2) Is cryptocurrency subject to yearly mark-to-market valuation?
No.
3) Are corporates taxed on gains on the sale of cryptocurrencies?
The gains/losses on the sale of cryptocurrencies are liable to corporate tax upon disposal at the aggregate rate of 23.87% in 2025 (for Luxembourg City).
4) Is payment for goods/services in cryptocurrencies a taxable event?
Yes.
5) What is the tax treatment of cryptocurrencies received from mining?
The mining of cryptocurrencies can be classified as a commercial activity, and hence taxable, if it goes beyond the mere management of one’s private assets. The Luxembourg tax administration has given criteria which can be used to determine the existence of a commercial activity, such as financing through debt capital, trading on behalf of third parties, frequent rotation of the stock of cryptocurrencies.
For corporates, cryptocurrencies received from mining are liable to corporate tax based on their market value upon receipt.
6) What is the tax treatment of cryptocurrencies received by airdrop?
Receiving cryptocurrencies for free should not give rise to income taxation at the level of the individual. Registration duties may apply. Any gain derived from any subsequent disposal of the cryptocurrencies would be subject to the tax treatment described in above.
For corporates, cryptocurrencies received by airdrop should be liable to corporate tax based on their market value upon receipt.
7) What is the tax treatment of cryptocurrency received from staking?
As there is no clear guidance, income from staking should be analysed on a case by case basis. An individual taxpayer will have to determine whether its income could be seen as interest or reward. Depending on the answer, the respective tax treatment of the receipt of interest or a gift could be applicable.
For corporates, cryptocurrencies received from staking should be liable to corporate tax based on their market value upon receipt.
8) What is the tax treatment of the lending of cryptocurrencies?
The tax treatment of the lending of cryptocurrencies and remuneration thereof has not been clarified by the tax administration. It could be seen as capital income.
For corporates, the lending of cryptocurrencies should be viewed as a taxable disposal. The remuneration should be liable to corporate tax based on its market value upon receipt.
9) What is the tax treatment of a hard fork?
A hard fork should be treated as a taxable disposal.
10) What is the tax treatment of employee salary in cryptocurrency?
Employment income should be subject to the normal progressive rate applicable.
11) How are gifts of cryptocurrency taxed, including in-game rewards?
No tax should be applicable to the gift of cryptocurrencies. Stamp duties and registration fees are applicable only when a registration is made with the notary on a voluntary basis.
12) Is there a tax-deferral when exchanging cryptocurrency/assets?
No.
13) Is there any transfer tax on the acquisition of cryptocurrencies?
No.
14) Is there obligations to declare cryptocurrency to tax authorities?
No.
15) Are there reporting obligations for cryptocurrency transactions?
None, other than their inclusion in the annual tax filing.
The EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules, which will come into effect in 2026, will require all service providers, of whatever size and wherever located, to report on crypto-asset transactions carried out by clients residing in the EU.
16) How are cryptocurrency transactions treated for VAT purposes?
The above transactions should be treated either as out of scope or exempt for VAT purposes.
Initial Coin Offerings
17) What is the tax treatment of Initial Coin Offerings for issuers?
Corporate tax should be due.
18)What is the VAT treatment of the ICOs, including rules on vouchers?
No VAT applicable.
19) Are ICOs liable to any stamp duty?
No.
Transactions in NFTs
20) What is the tax treatment for individuals of the creation of NFTs?
Luxembourg does not yet have a tax framework in relation to the creation of NFTs. However, it is possible to classify NFT as an artistic activity. Hence, the creator of an NFT could be seen as a self-employed artist, taxable as a self-employment category.
21) What is the tax treatment for corporates of the creation of NFTs?
The costs to create the NFTs should amount to the tax basis of the creator of the NFTs.
22) Are NFTs taxed differently to cryptocurrencies?
For individuals, the tax treatment of the NFT depends on the nature of the activity, whether it is of commercial nature, self-employment or miscellaneous income. The activity of trading NFTs should be seen as commercial activity.
For corporates, gains/losses on the sale of NFTs are liable to the corporate tax upon disposal. Currently, there are no rules which provide that the NFTs are deemed to represent any underlying assets (e.g. real estate), and that the corporate tax treatment should be the one applicable to the sale of such assets.
23) Can tax be deferred when exchanging NFTs for other NFTs/crypto?
No.
24) What is the tax treatment of gifted NFTs (incl. in-game rewards)?
In the case of reward in a game, no taxation would take place at the time the individual receives the NFTs (which would have a nil tax basis); any gains derived from any subsequent disposal should be treated as described above.
No taxation should arise on the gift of NFTs. Stamp duties and registration fees are applicable only when a registration is made with the notary on a voluntary basis.
25) Is there any transfer tax when acquiring NFTs for consideration?
There should be no transfer tax.
Currently, there are no rules which provide that NFTs are deemed to represent any underlying assets (e.g. real estate), and that the transfer tax treatment should be the one applicable to the sale of such assets.
26) Is it obligatory to declare a holding of NFTs to tax authorities?
No.
27) Are there tax reporting obligations specific to NFT transactions?
None, other than their inclusion in the annual tax filing.
28) How are transactions in NFTs treated for VAT purposes?
Currently, there are no specific VAT rules regarding NFTs and, given the absence of clarity regarding their legal characterisation, the VAT treatment thereof is uncertain.
In contrast to cryptocurrencies, transactions in NFTs may not be generally viewed as out of scope or exempt for VAT purposes. Also, the sale of NFTs may not be viewed as supply of goods.
Subject to the above uncertainty, there are some arguments that a sale of NFTs should be characterised as an electronically supplied service with the consequence that it should be liable to VAT in the jurisdiction where the customer is located.
Want to know more about cryptoassets and tax?
We also have guides and FAQs on how cryptocurrencies and NFTs are taxed differently in other European jurisdictions. You can view them online or download them as a single guide using the links below.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
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