156,000 tax declarations still to be treated

Did you know that 454,000 private taxpayers and companies declare their taxes in Luxembourg? On 31 December 2022, no fewer than 337,000 individuals and 117,000 legal entities were registered with the Tax Administration.

This figure has "increased by an average of 4% for individuals and 3% for legal entities" over the last ten years, says Administration director Pascale Toussing. It should be noted that 2018 was marked by "exceptional growth" because of the adaptation of the taxation of non-residents.

According to Toussing, a significant number of files are still pending at the beginning of 2023. As of 1 January, she acknowledged that "156,000 declarations of natural persons have not yet been taxed for the years 2018 to 2021".

Still in progress...

In the same four-year period, the figure for legal entities amounted to 72,000 declarations. This makes a total of 228,000 declarations which still need to be processed at the beginning of 2023. These figures include both declarations that are being processed and those which have yet to be filed.

On closer inspection, 35% of the declarations for the 2021 tax year are still pending for private individuals. In the case of companies, 43% of the returns have not yet been processed, thereby representing the bulk of the pending files.

10% of private declarations are still pending for 2020, 3% for 2019, and only 1% for 2018. The proportion is similar for company declarations.

Who is to blame?

These delays are as much attributable to taxpayers as to "the complexity of the files", explains Toussing. The director does not hide the fact that part of the problem is explained by a lack of resources in her own departments, which she says is "understaffed".

At the beginning of 2023, 441 full-time agents were responsible for taxation.

The net reinforcement of 500 additional posts announced in November 2021 for the period of 2022 to 2026, "should make it possible to at least partially absorb the understaffing of the Administration accumulated over the last decades", argues Toussing.

Which declarations should be prioritised?

Tax authorities normally give priority to returns "submitted within the legal deadlines", processed in the order in which they were received, said Toussing.

The director assures that the returns of natural persons "duly completed and submitted electronically via the MyGuichet assistant for the digital end-to-end tax return are generally processed within the 15-day deadline if the quality criteria are met".