For years, Luxembourg has been the Mecca of German taxpayers who either seek refuge from the tax authorities or who want to use financial investments and cheap loans from abroad. Only: Are there better interest rates on investments and loans in Luxembourg?
Luxembourg: investment interest
Many Germans consider investing in Luxembourg to be more lucrative, since tighter banking secrecy, especially with regard to foreign countries, means that their interests are better protected than in Germany, where accounts and income can be monitored much better by the tax office and the state. Banks in Luxembourg also offer the same range of products as in Germany: if you want to invest in funds, call money or time deposits, you can do so in Luxembourg.
The advantage: The German state cannot easily get access here – this can be granted, but only if there is suspicion of a crime (e.g. tax evasion) and an application for administrative assistance is made. Compared to Luxembourg, however, this must be very well founded so that it is allowed. In addition, there is no suspicion of criminal offenses that are not criminal offenses in Luxembourg.
Since Luxembourg banks also collect a capital gains tax and pay it anonymously to the home country of the account holder, this suspicion is in principle more difficult to raise, since at least Luxembourg is taxed properly. However, this suspicion can arise if regular transfers are made to the Luxembourg account and from the Luxembourg account to a German account.
The same applies if, on the way to your “holiday” in Luxembourg at the border, you should be picked up with a larger amount of money with an account statement that shows the withdrawal – because this is required as proof of a direct payment to a Luxembourg account to prevent money laundering.
In Luxembourg, however, interest on an investment is rather poor compared to other investments abroad or at German banks. Therefore, if you only want to open an account in Luxembourg due to better interest rates, this is not more advantageous than in Germany.
Luxembourg: interest on loans
Luxembourg loans are generally granted without an examination by the Credit Bureau, which is only located in Germany. The only thing that counts is the creditworthiness, which is determined using a procedure similar to that in Germany. However, a permanent, permanent job is also required, as well as a minimum age of 18 and a maximum age of 55 or 58 years. The applicant’s salary slips and information and proof of net household income are also required in order to determine creditworthiness.
The resulting higher administrative expenses and the slightly higher risk for the bank usually cause the lending rate to rise above the usual level in Germany, with comparable conditions.
The advantage of a Luxembourg loan is that, unlike Germany, it does not appear in the Credit Bureau. So if you want to keep your Credit Bureau information “clean” despite a short-term financial shortage, you could drive better with a small interest premium in Luxembourg, especially if you soon want to take out a larger loan (house construction, car purchase) in Germany and here with a credit entry in which Credit Bureau would get worse conditions.