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Measures List
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Measure Name
Date when measure came into force
Personal income tax - change in rate 2011/01/01
Introduction of a new income tax rate 2013/01/01
Results 1 - 2 of 2.

Generic Tax Name Personal income tax
Tax name in the national language Impôt sur le revenu des personnes physiques
Tax name in English Personal income tax
Member State LU-Luxembourg
Tax in force since 1967/12/04
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco

Social security contribution Employers
Legal base

Law of 4 December 1967 on income tax, Title 1, Articles 1-157ter (Mémorial A, 1967, pp. 1228-1275), as amended by successive laws and implementing regulations, the most recent of which are:

Law of 23 December 1997 amending income tax and other provisions (Mémorial A, 1997, p. 3328);

Law of 19 June 1998 introducing dependency insurance (Mémorial A, 1998, p. 710);

Budget Law of 21 December 1998 (Mémorial A, 1998, p. 2723);

Law of 12 February 1999 on the implementation of the 1998 national action plan for employment (Mémorial A, 1999, p. 190);

Law of 8 June 1999 implementing a complementary pension scheme (Mémorial A, 1999, p. 1644);

Law of 8 June 1999 introducing pension funds (Mémorial A, 1999, p. 1476);

Budget Law of 24 December 1999 (Mémorial A, 1999, p. 2675);

Law of 22 December 2000 (Mémorial A, 2000, p. 3021);

Law of 15 January 2001(Mémorial A, 2001, p. 698);

Law of 1 August 2001 (Mémorial A, 2001, p. 2440);

Law of 21 December 2001 (Mémorial A, 2001, p. 3308);

Law of 21 December 2001 (Mémorial A, 2001, p. 3312);

Law of 30 July 2002 (Mémorial A, 2002, p. 1718);

Budget Law of 20 December 2002 (Mémorial A, 2002, p. 3235);

Budget Law of 19 December 2003 (Mémorial A, 2003, p. 3685);

Law of 22 March 2004 (Mémorial A, 2004, p. 719);

Law of 15 June 2004 (Mémorial A, 2004, p. 1568);

Law of 9 July 2004 (Mémorial A, 2004, p. 1878);

Law of 9 July 2004 (Mémorial A, 2004, p. 2020);

Budget Law of 21 December 2004 (Mémorial A, 2004, p. 2983);

Law of 21 June 2005(Mémorial A, 2005, p. 1540);

Law of 21 June 2005 (Mémorial A, 2005, p. 1547);

Budget Law of 23 December 2005 (Mémorial A, 2005, p. 3387);

Law of 23 December 2005 (Mémorial A, 2005, p. 3370);

Law of 17 November 2006 (Mémorial A, 2006, p. 3448);

Budget Law of 22 December 2006 (Mémorial A, 2006, p. 4315);

Law of 22 December 2006 (Mémorial A, 2006, p. 4710);

Law of 21 December 2007 (Mémorial A, 2007, p. 3947);

Law of 19 December 2008 (Mémorial A, 2008, p. 2622);

Law of 18 December 2009 (Mémorial A, 2009, p. 5109);

Law of 17 December 2010 (Mémorial A, 2010, p. 4094);

Budget Law of 16 December 2011 (Mémorial A, 2011, p. 4365);

Law of 21 December 2012 (Mémorial A, 2012, p. 3830);

Law of 19 December 2014 (Mémorial A, 2014, p. 4843).

Who sets
The tax rate is set by

The tax base is set by

The reliefs are set by



Municipalities get a given percentage of the collected tax.

Geographical Scope

Grand Duchy of Luxembourg.

Domestic-source income of non-residents is Taxed
Not Taxed

Employment incomes of married couples are Taxed jointly
Taxed separately


All individuals whose domicile for tax purposes or usual place of residence is in Luxembourg or who receive taxable income there.

Tax object and basis of assessment
As general rule, taxable income under personal income tax includes


Income considered Domestic income
Worldwide income (subject to double-tax relief)

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable





The tax is assessed on the total net income, less special expenses. Total net income is calculated by taking total net income, determined separately for each of eight categories of income; losses made in one category of income may be set off against net income from other categories.

Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:


Deductions from the tax base
The following items are usually (partially or fully) deductible


The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child 922.50  EUR/National currency
Additional allowance for 2nd child 922.50  EUR/National currency
Additional allowance for 3rd child 922.50  EUR/National currency
Additional allowance for additional child 922.50  EUR/National currency
Additional allowance for old age dependents
  • Allowance for a profit made in the transfer or termination of a one-man business

The profit made in the transfer or termination of a one-man business is reduced by an allowance of 10,000 EUR. If the profit includes a capital gain on real property, the allowance is fixed at 25,000 EUR. 

  • Allowance for unavoidable extraordinary expenses

Each resident tax payer can, on demand, benefit from an allowance for extraordinary expenses that are unavoidable and significantly reduce his faculty to pay. Are particularly targeted medical expenses and disability expenses.

The amounts that can be deducted depend on the taxpayers revenue and on the number of children at his expense.

  • Allowance for a spouse

The allowance for a spouse is listed on the first additional slip for tax withheld of the spouse. The allowance consists of the lump sum for professional expenses, the lump sum for special expenses and the extraprofessional allowance.

  • Extraprofessional allowance for married taxpayers taxed jointly

The extraprofessional allowance is an allowance granted, on demand, in case of taxation of married taxpayers. In order to benefit from this allowance both taxpayers have to generate revenues from a professional activity, or if one of them generates a business income. The extraprofessional allowance amounts to 4,500 EUR per year.

  • Allowance for children at taxpayers' expense 

Each taxpayer having expenses related to children who are not living in his household, has the right to tax allowances. The allowance takes into consideration the real expenses without exceeding the sum of 3,480 EUR per year.

The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

  • Tax credit for hiring unemployed persons

Each taxpayer, hiring an unemployed person, obtains for 36 months beginning with the month of the hiring, a monthly tax credit corresonding to 15 % of the monthly gross remuneration.

  • Tax credit for life-long professional training 

Each taxpayer obtains, on demand, a credit for life-long professional training that corresponds to 10 % of the training fees.

  • Tax credit for new investments 

Each taxpayer has the right to obtain a tax credit for investments made. This credit amounts to 13% of the complementary investment or, considering the global investment, to 7% for the first block not exceeding 150,000 EUR and to 3 % for the block exceeding 150,000 EUR.

  • Tax credit for monoparental families 

An annual sum of 750 EUR is granted to unmarried tax payers as tax relief or tax credit.

  • Tax credit for wage-earners

Each taxpayer who generates an income from a paid occupation has the right to obtain an annual tax credit that amounts to 300 EUR.

  • Tax credit for the retired 

Each taxpayer who generates an income from a retirement pension has the right to obtain an annual tax credit that amounts to 300 EUR.

  • Tax credit for independents

Each taxpayer who generates a commercial gain or a profit as an independent has the right to obtain an annual tax credit that amounts to 300 EUR.

Losses can be
Carried-forward for Indefinite
Carried-back for Indefinite
Transferred to spouse or partner

Losses can be forwarded undefinitely.

The following income is exempted from income tax


  • Certain payments in cash from legal insurance against sickness and accidents;
  • certain allowances (e.g. family allowances);
  • certain types of pension (e.g. war pensions);
  • interest on certain types of government loan;
  • capital received from payment of a life insurance;
  • private investment income: €1,500 per year;
  • 50% ofthe income on capital paid by a company with share capital within the conditions and limits provided dy the law;
  • extra payments of wages for overtime, work at night, on sundays and public holidays, under the conditions and within the limits prescribed by regulation;
  • gifts offered by employers to employees, under the conditions and within the limits prescribed by the law.
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To  11,264.00  EUR/Natcur
Rate: 0.00 %
Bracket 2 From  11,265.00  EUR/Natcur
To  13,172.00  EUR/Natcur
Rate: 8.00 %
Bracket 3 From  13,173.00  EUR/Natcur
To  15,080.00  EUR/Natcur
Rate: 10.00 %
Bracket 4 From  15,081.00  EUR/Natcur
To  16,988.00  EUR/Natcur
Rate: 12.00 %
Bracket 5 From  16,989.00  EUR/Natcur
To  18,896.00  EUR/Natcur
Rate: 14.00 %
Bracket 6 From  18,897.00  EUR/Natcur
To  20,804.00  EUR/Natcur
Rate: 16.00 %
Bracket 7 From  20,805.00  EUR/Natcur
To  22,712.00  EUR/Natcur
Rate: 18.00 %
Bracket 8 From  22,713.00  EUR/Natcur
To  24,620.00  EUR/Natcur
Rate: 20.00 %
Bracket 9 From  24,621.00  EUR/Natcur
To  26,528.00  EUR/Natcur
Rate: 22.00 %
Bracket 10 From  26,529.00  EUR/Natcur
To  28,436.00  EUR/Natcur
Rate: 24.00 %
Bracket 11 From  28,437.00  EUR/Natcur
To  30,344.00  EUR/Natcur
Rate: 26.00 %
Bracket 12 From  30,345.00  EUR/Natcur
To  32,252.00  EUR/Natcur
Rate: 28.00 %
Bracket 13 From  32,253.00  EUR/Natcur
To  34,160.00  EUR/Natcur
Rate: 30.00 %
Bracket 14 From  34,161.00  EUR/Natcur
To  36,068.00  EUR/Natcur
Rate: 32.00 %
Bracket 15 From  36,069.00  EUR/Natcur
To  37,976.00  EUR/Natcur
Rate: 34.00 %
Bracket 16 From  37,977.00  EUR/Natcur
To  39,854.00  EUR/Natcur
Rate: 36.00 %
Bracket 17 From  39,855.00  EUR/Natcur
To  41,792.00  EUR/Natcur
Rate: 38.00 %
Bracket 18 From  41,793.00  EUR/Natcur
To  99,999.00  EUR/Natcur
Rate: 39.00 %
Bracket 19 From  100,000.00  EUR/Natcur
To   EUR/Natcur
Rate: 40.00 %

Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name: Impôt d'équilibrage budgétaire temporaire
A lump-sum amount:
A percentage of income:
A tax surcharge: 0.5 %

As per 2015 a new tax has been introduced “Impôt d'équilibrage budgétaire temporaire (IEBT)”. The IEBT is a temporary budget balancing tax and will be perceived on the same remuneration as the “contribution dépendance” and the rate is 0.5%.

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Annuities from life insurance
Prizes and awards
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities

Withholding taxes
The tax is withheld when paid to residents on: Dividends: 15.00 %
Final Creditable
Interests from governments bonds: 10.00 %
Final Creditable
Interests from corporate bonds: 10.00 %
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits: 10.00 %
Final Creditable
A 15% withholding tax is applied on dividend income, which can be considered being a prepayment. 50% of the gross dividend income is then included with other revenues and subject to the global personal income tax rate, (the other 50% are exempt from taxation). The 15% withholding tax is imputed with other taxes in the tax return. Beneficiaries will then pay the difference between the withholding tax already deducted and the total amount of tax payable.

A withholding tax of 15% applies as well to dividends paid to a non-resident company unless the rate is reduced or dividends exempted by an applicable tax treaty or if the parent subsidiary Directive applies.

Certain income interest received in Luxembourg by a natural person resident in Luxembourg is subject to a final withholding tax of 10%.


Taxpayers are divided into three classes dependant on whether they are married, widowed or receiving a tax allowance for a child living in their household.

There is a graduated scale with 19 income bands, to each of which corresponds a rate of tax ranging from 0 to 40 %; application of the rates varies according to the class to which the taxpayer belongs.

For the first band from 0 to € 11,265, the rate is 0 %; for the second band from € 11,265 to € 13,173, the rate is 8 %. Thereafter the rate is 10 %, subsequently increasing by 2 % per band. For incomes between € 41,793 and € 100,000, the rate is 39%. For incomes exceeding € 100,000 there is a uniform rate of 40 %. This basic scale is adjusted periodically to variations in the weighted consumer price index.

To provide resources for the unemployment fund, the liability for personal income tax is increased by a “solidarity” surcharge of 7 % of the amount payable under the above rules. The personal income tax is increased by 9 % for taxable income exceeding 150,000€ (tax classes 1 and 1a), respectively 300,000€ (tax class 2).

Tax due date

Tax is payable annually on the basis of tax returns within one month after receipt of the tax assessment notice.

Tax is paid in quarterly instalments in advance and withheld at source on certain forms of income (income from employment, pensions and annuities, income from capital).

The advance payments and the tax withheld at source are deductible against final income tax liability.

Any overpayment of tax is refunded in some cases.

Tax withheld on wages and pensions is adjusted annually, when the tax is not calculated by assessment.

If tax is not paid on time, interest is charged at a rate of 0.6 % month.

Tax collector

Administration of direct taxes (tax collector's office).

Special features

Married couples:

Incomes of married couples are treated as a single income for tax purposes and tax due is determined by the “splitting” system.


In general the method of assessing and collecting the tax due is similar as for resident taxpayers except that only income accruing in Luxembourg is taxable. No deduction is made for certain special expenses or for extraordinary expenses except the case where the non resident taxpayer is taxable in the Grand Duchy on at least 90% of his total professional income.

For non-residents only, royalties derived from literary and artistic work and income derived from professional sports activities are subject to income tax collected at source (10% on the gross amount of the receipts or 11% if the debtor takes the tax liability).


Losses suffered by business firms, farmers, foresters or persons practising a liberal profession may be carried forward indefinitely, provided the persons running the enterprise or other persons involved keep regular accounts.

Economic function

Environmental taxes

Tax revenue
ESA95 code d51m (d51a)

Annual tax revenue (millions)
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2013 4,062.00 EUR 8.73
2012 3,699.00 EUR 8.49
2011 3,542.00 EUR 8.39
2010 3,162.00 EUR 8.00
2009 2,917.00 EUR 8.04
2008 3,036.00 EUR 8.06
2007 2,678.10 EUR 7.28
2006 2,545.90 EUR 7.62
2005 2,161.50 EUR 7.27
2004 1,825.40 EUR 6.60
2003 1,690.10 EUR 6.53
2002 1,528.40 EUR 6.17
2001 1,588.50 EUR 6.75
2000 1,573.40 EUR 6.78