A beginner's guide to filing your tax return in Luxembourg

Not everyone finds joy in doing their own taxes. That’s why we've put together a short guide to help even the most number-averse person figure out where to start.

First things first: you’ll need the Form 100, currently only available in French or German. You can find it on guichet.lu or download it directly using this link. Make sure you have a valid LuxTrust token. Since the 2021 tax year, you can also file your return using the electronic assistant on the MyGuichet platform.

You’ve got two options: print and fill out the form by hand, or do everything online in your personal MyGuichet portal.

Let's start with the basics.

Class system

Your tax class determines how much tax is withheld from your salary:

Class 1: Single – though since 2018, couples can choose to be taxed individually, so this class doesn’t only apply to single people. It simply means you're taxed on your own, with no one else taken into account. As a result, this class has the highest tax withholding rate.

Class 1A: Single parents with at least one dependant child, or individuals over 65 – this class comes with a more favourable withholding rate than Class 1.

Class 2: Married or civil partnership couples taxed jointly – the couple is taxed as one unit rather than separately (which can sometimes be more favourable – more on that below!).

Who has to file a tax return?

It's mandatory if

• you're married and both spouses earn income
• you earn over €100,000 gross/year
• you have multiple income sources
• you're self-employed or have freelance income

Optional for everyone else, but often worth the hassle – you can deduct things like private pension plans and insurance interest from your taxes and get money back!

What can you deduct?

• Commuting expenses
• Interest on personal loans
• Childcare or education costs
• Cleaning services for personal home
• Insurance premiums
• Contributions to a private pension scheme
• Donations to certified charities
• Extraordinary fees

Joint taxes, bigger perks? 

When you get married in Luxembourg, you're automatically taxed as a couple. But since 2018, you've had the option to be taxed individually. This can be useful if one partner earns significantly more – or if one doesn’t work at all – since joint taxation can offer benefits in those cases. However, the closer your salaries are, the less financial advantage there is to filing jointly.

In some situations, choosing individual taxation within a marriage can actually save you money each month. You can still file a joint tax return at the end of the fiscal year and claim the €4,500 deduction, known as the 'abattement conjoint'. Couples in a civil partnership (PACS) can also benefit from this deduction.

My partner and I chose individual taxation, even though we're married, because at the end of the day, what hits your bank account is yours. With joint taxation, one spouse is taxed on their full salary, while the other is taxed at a flat 15%, which can mean more money in your pocket each month. But there’s a catch: this can be seen a bit like a loan. Come tax season, you’re taxed on your combined annual income, and couples in tax class 2 often find themselves owing money back.

Housing: purchasing property and mortgage interest deductions 

In the same year you buy a property, you can deduct mortgage fees, notary fees related to the loan, and bank commission fees for the mortgage.

If your property became available (ready to move into) after 31 December 2022, you can fully deduct your mortgage interest – no cap applies.

For older properties, the deduction is capped per person depending on when the property became available:

• Availability between 31/12/2018 and 01/01/2023: €4,000 per person
• Between 31/12/2013 and 01/01/2019: €3,000 per person
• Before 01/01/2014: €2,000 per person

Cross-border workers

You can be considered a Luxembourg tax resident if:

• At least 90% of your household income is earned in Luxembourg
• Your household’s net income from outside Luxembourg is under €13,000

If you and your partner meet one of these conditions – great! You're now considered a Luxembourg tax resident. That means you're eligible to apply for Class 2 status, qualify for joint taxation, and can start deducting expenses just like any other Luxembourg resident.

But what if only one partner works in Luxembourg?

No problem – for married or civil partnership couples, only one person needs to meet the criteria.

If you're looking for more specific advice – and from a professional nonetheless – read our explainer article here.