Who is required to file a tax return in Luxembourg?

First of all, not everyone is required to file a tax return. Some taxpayers are taxed at source, i.e. the tax is deducted directly from their salary or pension. This is the case for single, widowed, divorced or de facto separated residents who come under class 1 or 1a, and who only receive professional income in Luxembourg. This is also the case for married non-residents who come under class 1 and who only receive professional income in Luxembourg.

On the other hand, tax returns are compulsory for taxpayers who fall into one of the following categories:

• residents who are married, in a civil union or in a civil partnership and who come under class 2, unless they opt for individual taxation;
• non-residents who are married, in a civil union or in a civil partnership and who come under class 2, if they have opted to be treated as residents;
• taxpayers who receive non-professional income in Luxembourg, such as rent, interest, dividends, etc.;
• taxpayers who receive professional income in Luxembourg in excess of 100,000 euros per annum;
• taxpayers who receive professional income in Luxembourg combined with other professional income, the total amount of which exceeds 36,000 euros per annum under class 1 and 2, or 30,000 euros per annum under class 1a;
• taxpayers who receive capital income in Luxembourg subject to withholding tax in an amount exceeding 1,500 euros per annum.

Although you are not obliged to file a tax return, you may still do so on request, if you think it would be to your advantage. For example, if you have deductible expenses, tax reductions, tax credits, etc., you may be entitled to a tax refund.

How do I file my tax return?

To file your tax return in Luxembourg, you have two options: the paper version or the electronic version.

Filing a paper tax return

The paper version involves filling in model form n° 100, which you can download from the direct tax administration website, or receive by post if you request it. You must then return the duly completed and signed form, together with the required supporting documents, to the relevant tax office.

Filing your tax return online

The electronic version involves filing your tax return online, via the MyGuichet.lu portal. To do this, you must have a private or professional space on the portal, and log in with a Luxtrust certificate or electronic identity card. You will then be able to access an electronic assistant that will guide you step-by-step through filling in your return, in line with your situation. You can also download model form n° 100 in PDF format, complete it and return it via the portal. You can attach supporting documents by scanning or photographing them with your smartphone. You then sign your return electronically and receive an acknowledgement of receipt.

Please note that cross-border commuters who decide to file a tax return in Luxembourg are not exempt from filing a tax return in their country of residence if necessary.

What are the advantages and disadvantages of either option?

The paper version has the advantage of being simple and accessible to everyone, even if you don't have internet access or are not comfortable with digital tools. On the other hand, it also has disadvantages, such as:

• the risk of errors or omissions when filling in the form;
• the time it takes to send and process the mail;
• the cost of stamps and envelopes;
• no confirmation that your return has been received;
• difficulty in keeping a personal copy of your return.

The electronic version has the advantage of being quick, practical and secure. It allows you to:

• benefit from an electronic assistant that adapts the form to your situation and performs the calculations automatically;
• attach supporting documents easily by scanning or photographing them;
• sign your return electronically and receive an acknowledgement of receipt;
• keep a copy of your return in your personal space;
• follow the progress of your return.

On the other hand, the electronic version also has its disadvantages, such as:

• the need to have a Luxtrust certificate or an electronic identity card, which may come at a cost or require prior formalities;
• the possibility of experiencing technical difficulties or bugs on the portal;
• dependence on a stable and secure Internet connection.

What are the deadlines to be respected when filing my tax return in Luxembourg?

The general deadline for filing your Luxembourg tax return is 31 December of the year following that during which your taxable income falls. For example, for 2023 income, you have until 31 December 2024 to complete and submit your return.

Please note that if you do not meet the deadline, you may be liable to penalties such as:

• a tax increase of 10%;
• a fine of between €25 and €250;
• automatic taxation based on an estimate of your income.

What should I keep in mind when filing my tax return?

Here are a few tips to help you file your tax return correctly:

• gather together all the necessary documents, such as your salary certificates, bank statements, receipts for expenses, etc.;
• check your personal and family situation, and choose the tax system that is most advantageous for you;
• fill in the form carefully, respecting the headings and codes and indicating the amounts in euros;
• don't forget to declare all your income, even income that is exempt or subject to withholding tax, as this may affect your tax rate;
• take advantage of the deductions, reductions and tax credits to which you are entitled, depending on your expenditure, investments, donations, etc.;
• attach the supporting documents requested, and keep a copy;
• sign your return and send it in by the deadline, by post or electronically;
• check your tax calculation and dispute it if you find an error or discrepancy.

And don't forget that you can reduce the amount of income tax you pay by taking out insurance.

Which insurance premiums are deductible?

• Insurance contributions and premiums. The employee can deduct premiums paid to companies for life insurance (policy of at least 10 years), insurance in the event of death, outstanding balance insurance (to cover a loan), accident, invalidity or illness insurance.

• Contributions paid to mutual aid societies (supplementary hospitalisation, medical-surgical fund, etc.).

• Civil liability insurance premiums (vehicle liability, home liability, personal liability, etc.).

*This ceiling is aggregated into a single amount, which is a maximum of €672. This ceiling of €672 is increased by the same amount for the spouse and for each child in the household.

THE SINGLE PREMIUM FOR OUTSTANDING BALANCE INSURANCE

RETIREMENT SAVINGS PREMIUMS

SUPPLEMENTARY PENSION PLAN

You can contact one of our agents to optimise your deductible premiums.

If you have any doubts or difficulties, you can also consult the guichet.lu website or contact a tax adviser who will be able to draw up your Luxembourg tax return.