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I. Introduction

While cryptocurrencies are still largely unregulated in Luxembourg, the government issued instructions on the tax treatment of cryptocurrencies on July 26, 2018.[1] This circular establishes that Luxembourg does not consider cryptocurrencies to be an actual currency. Rather, cryptocurrencies are considered to be an intangible asset for tax purposes. [2]

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II. Taxation of Non-professional Traders

Buying and selling cryptocurrency is considered to be “speculation” as defined by Article 99bis of the Income Tax Law.[3] As such, profit from such an operation is only taxable if the sale of cryptocurrency occurred six months or less after the purchase, and the taxpayer earned more than 500 euros (approximately US$612) in total profits from speculation during the civil year.[4] If there is more than six months between the purchase and sale of an amount of cryptocurrency, profit from that operation is not taxed.

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III. Taxation of Professional Traders and Miners

A person’s cryptocurrency trading activity is considered a commercial activity under the Income Tax Law if it is a “for-profit independent activity exercised on a permanent basis and participating in general economic life.”[5] The 2018 circular states that “these conditions are regularly fulfilled” in cases involving cryptocurrency mining or online cryptocurrency exchange markets.[6] Income derived from these activities is therefore generally taxed as commercial profits.[7]

It appears that Luxembourg evaluates newly mined cryptocurrency for tax purposes at the time when it is received.[8]

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Prepared by Nicolas Boring
Foreign Legal Specialist
January 2021


[1] Circulaire du directeur des contributions, L.I.R. No. 14/5 – 99/3 – 99bis/3 du 26 juillet 2018, July 26, 2018, at 1, https://perma.cc/ED8J-QZLH.

[2] Id.

[3] Id. at 3; Loi modifiée du 4 décembre 1967 concernant l´impôt sur le revenu (as amended), art. 99bis, https://perma.cc/E96C-5UN4.

[4] Circulaire du directeur des contributions, L.I.R. No. 14/5 – 99/3 – 99bis/3 du 26 juillet 2018, at 3.

[5] Loi modifiée du 4 décembre 1967 concernant l´impôt sur le revenu (as amended), art. 14.

[6] Circulaire du directeur des contributions, L.I.R. No. 14/5 – 99/3 – 99bis/3 du 26 juillet 2018, at 2.

[7] Id.

[8] OECD, Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues 24 (2020), https://perma.cc/BT7B-PLTH.

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Last Updated: 02/05/2021