The latest round of tripartite negotiations resulted in an agreement late on Friday, with major implications for indexation, tax brackets and energy subsidies.

The third tripartite meeting in 12 months was held in Senningen on Friday, bringing together the Grand Duchy's government, employers and unions.

After eight hours of negotiations, an agreement was reached, with Prime Minister Xavier Bettel announcing the new measures in a press conference.

The wage indexation postponed from 2022 is set to go ahead in April 2023. Meanwhile, Bettel announced that a further indexation later in the year is set to be fully compensated by the Employers’ Mutual Insurance Scheme up to, and including, January.

Tax brackets are expected to be adjusted to the level of two and a half indexations in 2024, with Finance Minister Yuriko Backes explaining that there is no space for such a measure this year.

The tripartite also agreed to extend the current energy subsidies, meaning the price cap on electricity and gas will now be extended by a full year before being phased out, with the aim of maintaining inflation at 2.8% in 2024.

A new tax credit will be introduced for this year, covering the amount of two index instalments, and will apply retroactively from 1 January 2023. In addition, a climate tax credit will apply from 1 January, to compensate for the CO2 tax.

The negotiations in Senningen Castle also covered housing issues, with the assembled parties agreeing to raise the amount for notarial deeds relating to property (also known as the “Bëllegen Akt”) from €20,000 to €30,000. In addition, the deductible amount for mortgage loans will be raised from €2,000 to a maximum of €3,000 for this fiscal year.

RTL

Bettel outlined the agreement in a press conference on Friday evening / © RTL

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Correction: An earlier version of this article incorrectly stated that there would be 'no further indexation in 2023.'