Over 354,000 tax returns are filed with the Luxembourg Inland Revenue each year, and every year the process causes no small amount of stress for many people. This year, as part of a broader administrative simplification programme, the tax administration has introduced pre-filled tax returns for eligible citizens, with several thousand already sent out.
The process is straightforward. Data already held by the tax authorities, including salaries, pensions, and interest payments, is automatically filled in the form. A person simply has to check the information, sign the document and send it back.
Jean-Paul Olinger, director of the Luxembourg Inland Revenue, explained that this initiative is part of a longer-term vision to fully digitalise tax returns and to expand pre-filling as far as possible. According to Olinger, the administration is already in touch with 23 ministries and public bodies, numerous municipalities, the banking association ABBL, and the insurance association ACA, exploring how data can be obtained directly under a Once Only principle, provided citizens give their consent.
The goal is faster, more accurate tax returns, and a simpler experience for citizens overall.
In principle, the idea is sound. In practice, however, the rollout has had a rocky start according to Christophe Knebeler of the Luxembourg Confederation of Christian Trade Unions (LCGB) trade union board. He says the LCGB has been fielding a growing number of calls from people who have found errors in their pre-filled forms and have subsequently had to complete a standard tax return from scratch, as in previous years.
“The tax office really needs to reconsider how it wants to proceed”, he said. “The way it has been done is certainly not well implemented. There is not a single form without one single figure that does not have some sort of issue, requiring some additional explanation, and that does not help the taxpayer at all. It is not a simplification for the citizen, and it is not a simplification for the tax office either, because they send out a pre-filled form and then receive a standard tax return in return, benefiting no one.”
The sources of error are varied, Knebeler explained. Missing data may reflect a change in the taxpayer’s situation compared to the previous year. Deductions are a particular sticking point: insurance premiums, for instance, can change year on year, and the tax office can only draw on figures from the previous return, making it almost inevitable that the pre-filled amount will not match what was actually paid in the new tax year.
Both the LCGB and the tax administration strongly advise anyone who receives a pre-filled return to check all the information carefully before signing. The LCGB also organises tax evenings where members of the public can learn how a tax return is structured and what can be claimed as a deduction. The tax administration, meanwhile, operates a dedicated hotline, and the website 123easy.lu offers further information on the pre-filled return.
The Luxembourg Inland Revenue and professional tax advisers remain available to the public to assist with any other questions.
