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Luxembourg Carried Interest – New Tax Regime (2026)
The recently adopted regime (the “New Regime”), applies to carried interest acquired under a contract (“Contractual Carry”) or to carried interest strictly linked to, or represented by, a direct or indirect investment in the underlying fund, which is held for more than six months (“Participation Carry”).
In both cases, carried interest compensates the fund manager with a share of the fund’s overperformance. This aligns the manager’s interests with those of the investors. In other words, the manager cannot receive ordinary bonuses through this method.