Luxembourg is part of The European Union’s Working Time Directive, which establishes working hours, rest periods, and annual leave policies. In Luxembourg, the standard working time is 8 hours per day and 40 hours per week. One is allowed up to 2 hours of overtime per day and can work up to 48 hours per week (Rao 2023). By law, Luxembourgers must take an 11-hour rest from their last 24-hour working shift (Van Dyck, 2023). As per Luxembourg’s Working Time Directive, the legal paid time off is set to 26 working days per year (Guichet Public, 2023). The quantity of paid time off is determined by the number of annual hours one works. Employees are provided reasonable work hours, rest time, and paid time off, helping them have a better social, family, and mental life.
As a current member of the European Union and the European Single Market, Luxembourg follows the standard external tariff policy that charges tariffs on goods imported from nations outside the European Union. Luxembourg profits from free trade agreements negotiated with other countries, which have eradicated or decreased tariffs on goods imported from those countries. Luxembourg has one of the most alluring tax systems on a global scale, making it a powerhouse for foreign investors and business trades. The country offers inferior corporate tax rates. Its Corporate Income Tax rate is 17% for companies with taxable income over €200,00, leading to an overall tax rate of 24.94% in Luxembourg City (Luxembourg. Corporate, 2023). This comprehensive tax rate includes the municipal tax rate of 6.75%, helping large-scale companies pay less taxes than the rest of Europe. “Interest received by companies with a legal personality, resident or not, fully taxable or not, is exempt from withholding tax” (Guichet, 2023). A significant factor for companies to invest in Luxembourg is the exemption from withholding tax on interest payments, helping companies save a ton of money. Luxembourg has signed numerous double taxation treaties with the United States to ensure that individuals and businesses are not taxed again on the same earnings (Washington, 2023).
