Annual accounts in a foreign currency in Luxembourg

Are annual accounts in a foreign currency allowed in Luxembourg?

Annual accounts in a foreign currency are allowed in Luxembourg: the accounting law prescribes no particular currency, and the Accounting Standards Commission holds that an undertaking governed by ordinary accounting law has no obligation to use the euro, no obligation to follow the currency of its share capital, and no obligation to adopt its functional currency.

The silence of the statute is not a gap: it points to a well-established practice in the Grand Duchy, which the Accounting Standards Commission set out in its Q&A 22/026, revised in May 2023. The freedom is real, but it operates within precise limits.

The question mostly arises for companies whose business settles in another currency: a holding company whose participations and dividends are in dollars, a subsidiary whose group consolidates in Swiss francs. Keeping the books in the currency of the transactions avoids recording translation differences every year that match no actual cash flow.

We regularly see the opposite setup: books kept in euro out of habit while almost every transaction is in dollars, with a conversion redone by hand in a spreadsheet at each closing. The result becomes hard to explain to the board, with exchange differences sometimes weighing more than the business itself. This is a call to make at incorporation with a licensed accountant in Luxembourg.

Which currency may be used for the accounts in Luxembourg?

The currency used for the accounts and the annual accounts in Luxembourg must be legal tender, fully convertible and freely usable, and issued or guaranteed by a central bank or a public authority. These three cumulative characteristics are the ones set out by the Accounting Standards Commission, and they settle most cases on their own.

They exclude cryptocurrencies in particular. The Accounting Standards Commission says so expressly: as at the publication date of its Q&A, a cryptocurrency does not display these characteristics, which appears to rule out keeping the books and preparing the annual accounts of a Luxembourg company in bitcoin.

The May 2023 revision has a practical edge. It removed the reference to the ISO 4217 standard as the international boundary of eligible currencies and replaced it with a reference to the well-established practice in the Grand Duchy of Luxembourg. The test is therefore not a closed list but a set of characteristics, to be assessed currency by currency.

One last limit is often overlooked: singleness. Every item of the balance sheet, of the profit and loss account and of the notes, as well as the content of the accompanying reports, must be presented in one single and same currency. A balance sheet in dollars with notes partly in euro delivers neither the true and fair view nor the comparability that annual accounts are meant to provide.

Must the annual accounts follow the currency of the share capital?

The annual accounts need not follow the currency of the share capital in Luxembourg: accounting law requires no alignment between the two, so a company may keep its books in a currency other than the one in which its capital is expressed.

Company law does not require the capital to be denominated in euro either. Companies whose purpose points them at markets governed by another currency frequently express their capital in that currency and keep their books in the same one. The two decisions nonetheless remain legally distinct, and they are better taken separately and deliberately.

The trap lies elsewhere. Minimum capital is set in euro by law depending on the corporate form, EUR 12,000 for the private limited liability company and EUR 30,000 for the public limited company. If exchange rate movements push the euro equivalent of a capital denominated in a foreign currency below that legal minimum, the position must be corrected immediately. A lasting depreciation of the capital currency is therefore a governance matter, not merely a presentation one.

The link between the two currencies remains a question in its own right, which the Accounting Standards Commission addresses in a separate Q&A, 23/030 of May 2023: it examines whether the accounting currency is tied to the share capital currency and whether changing one is conditional on changing the other. The very fact that the question is asked shows the answer is not self-evident.

Can the currency of the annual accounts be changed later on?

The currency of the annual accounts can be changed during the life of a Luxembourg company, but it stays exceptional: the Accounting Standards Commission holds that the choice is in principle made at incorporation, and that any later change must remain exceptional and justified.

CNC Q&A 23/030, published in May 2023, is the reference text. It addresses four questions: whether a change during the life of the company is possible at all, the link between the accounting currency and the share capital currency, which body is competent to decide, and the effective date depending on whether the company ties that change to a change of capital currency.

The effective date distinction deserves attention. A company that changes its capital currency and its accounting currency in one move is not in the same position as one that changes only its accounting currency, and the two do not mechanically take effect on the same date. Fixing that date before the closing avoids a financial year presented in two successive currencies.

In practice the change is documented like a change of accounting method: a written justification, a decision by the competent body, disclosure in the notes and consistent comparatives. We do not set out here the detailed answers of Q&A 23/030, whose full text could not be read in the drafting environment; the point is flagged in the last section.

How are foreign currency annual accounts filed with the RCS?

Annual accounts in a foreign currency are filed with the Luxembourg trade and companies register by the ordinary route: the structured data is validated on the eCDF platform, then the accounting package is filed, amounts being expressed in euro by default unless another currency is specified.

The chain is the same as for accounts in euro. Unless authorised to apply IFRS, the undertaking presents its trial balance under the standard chart of accounts and has its annual accounts validated on the eCDF platform before filing with the register. Data is entered either through standardised PDF forms or by transferring an XML file generated by the accounting tool, and the registers then automatically retrieve the validated structured data.

Currency is therefore not a technical obstacle: it is a field on the form. The point to watch is consistency between the currency declared on the structured forms, the currency of the annual accounts approved by the general meeting and the currency of the unstructured documents filed alongside them, the management report in particular. A discrepancy shows up immediately on the register.

The accounting law adds one option: annual accounts may, in addition to being published in the currency in which they are drawn up, be published in euro using the conversion rate at the balance sheet date, that rate being disclosed in the notes. This is an additional publication, not a substitute, and it changes neither the filing deadlines nor the surcharges that apply to late filing.

How is tax computed on a balance sheet in a foreign currency?

Tax remains payable in euro in Luxembourg even on a balance sheet drawn up in a foreign currency: the direct tax administration allows taxable income to be determined in that currency and then converted into euro at the average exchange rate or at the year-end rate.

The government presented the regime in June 2014 as a simplification measure: accepting the commercial balance sheet in the foreign currency stops taxable income from being influenced by conversion differences arising when a tax balance sheet is drawn up in euro. The circular carries the references L.G.-A no. 60, L.I.R. no. 23/3, I.C.C. no. 39, Eval. no. 59 and I.Fort. no. 49; the version in force is the one of 6 July 2018.

Entry into the regime is not automatic. A written and duly reasoned request, together with the supporting documents, must be addressed to the competent tax office, the date of receipt being decisive. For the transition financial year, the entity must still draw up a tax balance sheet in euro, even though the profit for that year will ultimately be determined in the chosen currency. From that year onwards, the investment tax credit is determined on the foreign currency amounts resulting from the balance sheet.

The consequences carry over to the other taxes. For net wealth tax, the foreign currency balance sheet total is converted into euro at the average rate or at the year-end rate according to the option exercised, and it is that converted total which then feeds the thresholds expressed in euro, including those of the minimum net wealth tax. The reserve set up in the foreign currency for the net wealth tax reduction is converted instead at the rate at the closing date of the last balance sheet preceding the key date.

The rates to be used are not a free choice: they are published each year in the annex to the L.G.-A no. 60bis circulars. The latest, circular no. 60bis/11 of 27 January 2026, gives the 2025 exchange rates, with the closing rates at 31 December 2025 and the average rates, drawn from the European Central Bank reference rates.

How are transactions in another currency recorded?

A transaction denominated in a currency other than the accounting currency is recorded in Luxembourg, on initial recognition, by applying the exchange rate at the transaction date. How the resulting balances are then remeasured at the closing depends on the approach the undertaking has adopted, and that is where practice diverges.

The Accounting Standards Commission wrote its Q&A 22/027 precisely for that reason: it observes heterogeneous Luxembourg practice, between the classical approach, the monetary versus non-monetary approach and the short-term versus long-term approach. The text covers initial recognition, remeasurement of balances at the year end, the effect of hedge accounting, and the disclosures required in the notes.

Two consequences follow. Changing the accounting currency does not remove exchange differences: it only moves the boundary between what is in a foreign currency and what is not. And the approach adopted must be described in the notes, then applied consistently from year to year.

The general framework for these rules, with the standard chart of accounts and the valuation rules, is set out on our page on LuxGAAP accounting. The choice of currency belongs with it as a structuring decision, to be documented from the first closing rather than reconstructed during an audit or a sale process.

Sources and verification

Written for Financial Services Luxembourg and reviewed before publication by Mickaël LOC, licensed accountant (authorisation 10077274). Sources were verified on 24 September 2026, the date on which every rule, reference and date cited here was cross-checked against an official public source.

The sources consulted are as follows. The Accounting Standards Commission, for its Q&A 22/026 (R) revised in May 2023 (silence of the statute, freedom grounded in well-established practice, characteristics required of the currency, exclusion of cryptocurrencies, removal of the ISO 4217 reference, single currency across the accounts, absence of alignment with the share capital currency, immediate correction below the legal minimum, choice made at incorporation), for its Q&A 23/030 of May 2023 on changing the currency, and for its Q&A 22/027 on foreign currency transactions (rate at the transaction date, remeasurement at the closing, heterogeneous approaches, hedge accounting, disclosures in the notes). The amended law of 19 December 2002 on the trade and companies register and on the accounting and annual accounts of undertakings, for the optional publication in euro at the closing rate. The eCDF platform and the guichet.public.lu portal, for amounts expressed in euro by default unless another currency is specified, for the standard chart of accounts and for the validation-then-filing chain. Finally the Luxembourg direct tax administration, for circular L.G.-A no. 60 / L.I.R. no. 23/3 / I.C.C. no. 39 / Eval. no. 59 / I.Fort. no. 49 of 6 July 2018, stemming from that of 16 June 2014 (written reasoned request, tax balance sheet in euro for the transition year, conversion of taxable income, of the balance sheet total and of the reserve, investment tax credit), and for circular no. 60bis/11 of 27 January 2026. The government press release of June 2014 was used for the presentation of the regime.

Four points could not be verified against the primary text and are therefore not asserted here. First, the article number of the law of 19 December 2002 carrying the additional publication in euro: PDF files and consolidated texts are blocked by the network proxy of our drafting environment, sources having been read through indexed extracts. Second, the complete list of conditions set by circular L.G.-A no. 60, whether the option is revocable once granted and for how long it binds. Third, the detailed answers of CNC Q&A 23/030, of which only the questions covered could be read. Fourth, the link between the converted balance sheet total and the minimum net wealth tax brackets is our own reading. Readers can confirm these points on cnc.lu, legilux.public.lu, impotsdirects.public.lu and with their tax office.

This article sets out the state of the law at the date of publication and is not personalised advice: choosing an accounting currency commits the presentation of the accounts, the governance of the share capital and the tax treatment over several financial years, and it depends on how each company's transactions are structured. Report an error to contact@financialservices.lu: corrections are dated in the article.