Resident and non-resident taxpayers bound by a civil partnership (PACS) are taxed in tax class 1 as single people throughout the year. However, they have the possibility to opt for a joint taxation in tax class 2 retroactively via the tax return, in the year following the tax year.
In this case, the civil partnership must have existed during the entire tax year, i.e. from January 1st to December 31st. Consequently, if the partnership was entered into in the middle of the year, the partners cannot request retroactive collective taxation via the tax return for that year. Furthermore, the partners must share the same home or residence, i.e. they must be declared at the same address.
When submitting their first request for joint taxation, civil partners living in Luxembourg must submit a copy of the certificate issued by the public prosecutor's office (Parquet général) in connection with the listing of the civil partnership in the civil register. If the request for joint taxation comes from cross-border taxpayers, the document issued by the relevant authorities in the state in which the civil partnership formed, certifying the existence of the partnership, must be attached.
Even if retroactive joint taxation is requested for a given tax year, this does not oblige the to do the same for the following year.
The purpose of a joint taxation is to reduce the tax burden, since the tax rate in tax class 1 is higher than in tax class 2.
The question therefore arises as to how much deduction is available to civil partners?
It should be considered, however, that if one taxpayer is taxed in tax class 1 and the other in tax class 1a, it is advisable to analyse, depending on the incomes of both parties, whether or not retroactive taxation in tax class 2 via the tax return is interesting.
The LCGB will advise you on the best option for your personal situation. The LCGB also helps you with various deductions and offers its members free assistance in filing their tax returns.
