The tax return is only obligatory under certain conditions for employees or pensioners. In all other cases, it is up to you to decide whether to file a tax return. However, for insurance or other financial products for example, it allows for a tax deduction and can therefore be advantageous.
Who (residents and non-residents) is required to file a tax return?
- households with taxable income in Luxembourg of over €100,000;
- when a combination of numerous incomes (wages or pensions) exceeds €36,000 for taxpayers in classes 1 and 2, and above €30,000 for taxpayers in class 1A. The same is true for non-resident households;
- married non-resident taxpayers who have opted for joint taxation, as indicated on their tax card;
- when the taxable income exceeds €11,265 and includes more than €600 of income which are not levied at source by the ACD;
- when the taxable income includes more than €1,500 of income which is subject to withholding tax on income from movable assets;
- taxpayers whose income is taxable by the "head of the family" who have opted for collective taxation, who are not de facto separated, one of whom is a resident taxpayer and the other is a non-resident person;
- taxpayers whose taxable income includes more than €1,500 of net income subject to withholding tax on income from royalties;
- taxpayers, who have been obliged by the Direct Tax Administration to submit an income tax return.
Why file a tax return if I am not obligated to do so?
In certain cases, filing a tax return might reduce your tax burden. For example:
- in order to deduct certain costs such as special expenses (e.g. contributions to a building savings scheme and insurance premiums, interest on a consumer loan's debit balance, annuities paid in relation to a divorce, donations made to organisations working in the public interest or non-governmental development organisations, etc.) or one-off costs (medical, disability expenses to be paid by the taxpayer, etc.);
- when tax is levied at source on capital gains (e.g. share dividends, bond coupons, etc.);
- when there is a loss of income (e.g. in the case of negative net income from renting a property).
What's new? - Deadlines
As of this tax year, the tax return must be submitted by 31 December of the current year. This deadline applies both to persons who have to file a tax return and to those who file voluntarily.
The Luxembourg Confederation of Christian Trade Unions (LCGB) advises you on the best option for your personal situation. The LCGB also helps you with tax deductions and offers free assistance to its members with filling in the tax return.
Find out more on the LCGB's website.
