The glossary to understand and take action

Municipal business tax

Municipal business tax (ICC) is a direct tax linked to commercial profit, the calculation of which notably takes account of a municipal rate.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

It should not be confused with corporate income tax. A company’s overall tax rate cannot be inferred from only one of these taxes without examining the financial year and municipality concerned.

In your file

What this changes in practice

ICC contributes to the taxation of commercial profit in Luxembourg. Its calculation must be distinguished from that of IRC, even where both concern the same company. The basis, adjustments and municipal elements must be examined for the relevant financial year. When preparing a tax budget, it is preferable to present each tax separately and reconcile advance payments with the estimated charge and then with the assessments received.

A scenario to help you understand

Educational example

Two companies with comparable accounting results are established in different municipalities. The manager does not directly apply one company’s total tax burden to the other: they have the municipal component checked, in particular.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Identifier la commune et l’exercice
  • Distinguer résultat comptable et base imposable
  • Rapprocher avances et imposition définitive

The practical question

Find out more

Pourquoi suivre l’ICC séparément des autres impôts ?

L’ICC possède son propre calcul et son suivi administratif. Le résultat comptable sert de point de départ à une analyse fiscale, sans être nécessairement la base finale. Dans le budget, distinguez cet impôt des autres charges fiscales et suivez les avances et régularisations afin d’expliquer les montants payés et les soldes restant dus.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

Corporate income tax (IRC)The term corporate tax commonly refers to the taxation of companies’ profits; in Luxembourg, IRC is one of the taxes to be distinguished.Tax advance paymentProvisional tax payment that is reconciled with the final tax assessment for the relevant period.Direct Tax Administration (ACD)The Direct Tax Administration (ACD) is responsible for direct taxes falling within its remit.Corporate taxationCorporate taxation encompasses the taxation and filing rules applicable to a company and its transactions.Tax return — Form 500Form 500 refers to the tax return form for entities, with the sections and appendices corresponding to the relevant year and situation.Tax returnA tax return provides the administration with the information needed to assess or verify a tax for a given person and period.

Put it into practice

Explore further with our guides

Practical guideCorporate tax return: prepare the documents and monitor filingPractical guideCorporate income tax (IRC): understanding advance payments and preparing the settlementPractical guideMunicipal business tax: understanding the tax base and the municipalityPractical guideTax losses: organising tracking and carryforward supporting documents

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.