Filing a tax return in Luxembourg

How do the tax authorities work in Luxembourg? How are taxes calculated? What are the differences between cross-border workers and residents? And what’s the best way to fill out a Luxembourg tax return? Follow the guide!

Tax payment method
Income to declare
Tax rate
When to file a tax return
Help with filling in a tax return
Deadline for filing your tax return

How to pay tax in Luxembourg

In Luxembourg, income derived from salaried work or a pension is subject to income tax.

This income tax is levied at source by your employer. The tax your employer will pay to the tax authorities is calculated on the basis of your tax card (carte d’impôt or fiche de retenue d’impôt).

As such, this amount is directly deducted from the gross pay you have negotiated with your employer.

Good to know

The tax authorities post each taxpayer’s tax card to their home address once a year, typically in late March, or in the event of a change of personal circumstances (marriage, birth of a child, etc.).

As soon as you receive this card, you should give it to your employer.

Does income from Luxembourg have to be declared?

Despite this withholding tax, there are certain circumstances (see below) in which you must declare your Luxembourg income by filing a tax return with the Luxembourg Inland Revenue (Administration des contributions directes – ACD).

Once you have done so, you may need to pay more tax or, conversely, the tax authorities may repay some of your income to you.

If you’re employed in Luxembourg but you live in Belgium, France or Germany, bear in mind that your Luxembourg income is exempt from tax in your country of residence by virtue of bilateral tax agreements between countries.

You’ll still have to declare it via a tax return filed in your country of residence, though, even if you have filed a tax return in Luxembourg.

How is the tax rate calculated?

In Luxembourg, there are three tax classes (1, 1a and 2) based on a number of criteria:

your marital status (single, married, divorced, widow(er), etc.);
your parental status (whether or not you have dependent children);
your residency status;
your age.

Your tax rate is calculated based on your tax class and income. The higher your income, the higher your tax rate.

Find out your tax class

Non-resident :

Status	No children	With a child/children entitled to a tax reduction	Aged over 64
Single	1	1a	1a
Married and taxed jointly on Luxembourg and foreign income**	2	2	2
Married and taxed separately on Luxembourg income alone***	1	1	1
Married but having requested neither joint nor individual taxation****	1	;1	1
Divorced or separated for under three years and benefitting from the transition period	2	2	2
Divorced or separated for over three years	1	1a	1a
Widow(er) for under three years	2	2	2
Widow(er) for over three years	1a	1a	1a

Resident :

Status	No children	With a child/children entitled to a tax reduction	Aged over 64
Single	1	1a	1a
Married, taxed jointly	2	2	2
Divorced or separated for under three years	2	2	2
Divorced or separated for over three years	1	1a	1a
Widow(er) for under three years	2	2	2
Widow(er) for over three years	1a	1a	1a

Do I need to file a tax return in Luxembourg?

There are a number of circumstances in which taxpayers, whether they are resident or non-resident, and whether their Luxembourg income is derived from salaried work or a pension, must file a tax return in Luxembourg:

when married non-resident taxpayers have opted to be treated as resident taxpayers, with joint or individual taxation, and therefore fall under tax class 2;
when the household has a taxable income in Luxembourg of over EUR 100,000;
when a resident household has several sources of income (two salaries, one salary and a pension, two pensions, one salary and benefits from the National Employment Agency (Agence pour le développement de l’emploi – ADEM), etc.) and the sum total of the two sources of income exceeds EUR 36,000 for taxpayers in classes 1 and 2 and EUR 30,000 for taxpayers in class 1a;
when a non-resident household or a single taxpayer has several sources of income taxable in Luxembourg and the sum total of the two sources of income exceeds EUR 36,000 for taxpayers in classes 1 and 2 or EUR 30,000 for a taxpayer in class 1a;
when the household has other income of over EUR 600 per year that is not taxed at source (rent payments in Luxembourg, investment income in Luxembourg, etc.);
when the taxable income of a Luxembourg resident includes over EUR 1,500 of domestic investment income subject to withholding tax.

There are also circumstances in which it may be beneficial to file a tax return even though it isn’t mandatory.

This is particularly true of cross-border workers who may wish to declare certain deductible expenses and thereby reduce the tax bill for their Luxembourg income. Feel free to reach out to a professional for guidance on this topic.

How to fill in a tax return in Luxembourg

You can fill in your tax return in paper format or online if that’s easier for you.

As a general rule, in February of each year, every taxpayer liable for tax in Luxembourg receives a tax return form sent by post to their home address or an electronic invitation to declare their income to the Luxembourg Inland Revenue (Administration des contributions directes – ACD).

We publish an annual tax guide to help you fill in your Luxembourg tax return. It contains advice and practical examples of the best way to complete your return.

You can order a hard copy or download it as a PDF.

Read the tax guide

When to file a tax return in Luxembourg

Taxpayers are required to file their tax return with the tax office, whether in paper or digital form, no later than 31 March of the year after the income was received.

Frequently asked questions

How can non-residents opt to be treated as residents for tax purposes?

As a non-resident, you can ask to be treated as if you were a taxpayer living in Luxembourg. Provided that you meet the eligibility criteria, this will entitle you to the same deductions and tax credits granted to resident taxpayers.

If you choose not to take this option, you will only have to pay tax in Luxembourg on the income you receive in Luxembourg. In this case, fewer of your expenses will be tax deductible.
What are the conditions for cross-border workers to be treated as residents for tax purposes?
The following can be treated as resident for tax purposes on request:
- non-resident taxpayers who earn at least 90% of their worldwide income in Luxembourg;
- taxpayers living in Belgium if over 50% of the household’s professional income is taxable in Luxembourg.

Tax deductibility varies based on the personal situation of each client and is subject to change.
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