Under the framework of the Lisbon strategy for growth and employment in the European Union, Luxembourg added Article 50bis to the Income Tax Act 1967 at the end of 2007.

Based on this regime, Luxembourg undertakings and Luxembourg branches of foreign companies can benefit from an exemption of 80% on revenue (ie, royalty fees) derived from patents, trademarks, designs and domain name rights, as well as from copyright on software, to the extent that such rights have been established or acquired after December 31 2007. The exemption brings the effective tax rate for such revenues to approximately 5.85%.