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Generic Tax Name Personal income tax - Fixed by assessment
Tax name in the national language Impôt sur le revenu des personnes physiques prélevé par voie d'assiette (Special method of collection of personal income tax)
Tax name in English Personal income tax fixed by assessment
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
Other

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

Social security contribution Employers
Employees
Other
 
Legal base

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

Law of 21 December 2001 (Mémorial A, 2001, p. 3320);

Law of 21 December 2007 (Mémorial A, 2007, p. 3320);

Law of 19 December 2008 (Mémorial A, 2008, p. 2624);

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

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

Municipalities get a given percentage of the collected tax.

 
Geographical Scope

Grand Duchy of Luxembourg.

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

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments

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

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























Comments

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

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












Comments


Comments

Income.

The tax is assessed on the net income computed as the difference between receipts and related expenses.

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





Comments

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

















Comments

Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
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:

















Comments

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

Exemptions
The following income is exempted from income tax























Comments


Comments

See “personal income tax”.

 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To   EUR/Natcur
Rate: 1.00 %
Comments

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

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

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

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
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Withholding taxes
The tax is withheld when paid to residents on: Dividends:
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments


Comments

The tax is withheld by the employer or the pension fund for the account of the worker or the pensioner in accordance with tables of monthly or daily amounts which are drawn up on the basis of the general scale for personal income tax and allow for the standard deductions for special expenses (€ 480 per year), and the extra income tax charge for the re-employment fund (7 %) and other costs of acquisition (€ 540 per year for workers in paid employment and € 300 per year for persons in receipt of pensions).

In 2007 the tax allowance for children was substituted by a tax credit. In 2008 allowances for the employed, pensioners and monoparental families were substituted by tax credits (see template on personal income tax). Furthermore, a tax credit for independent persons (“credit d'impôt pour indépendants”) deriving income from trade or business, income from agriculture and forestry or income from self-employment has been introduced which amounts to 300 euros per year.

Tax withheld can be adjusted at the end of the tax year in accordance with Article 145 of the Law on income tax. When tax is calculated by assessment, withheld tax on wages, salaries and pensions is deductible from tax liability.

 
Tax due date

Tax is payable upon assessment (tax returns need to be filed before 31 March) and depending on the income level and associated tax due at the moment of the assessment, quarterly advance payments are fixed which are due in March, June, September and December.

 
Tax collector

Administration of direct taxes (Administration des contributions directes).

 
Special features

 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51m (d51ac)

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 609.00 EUR 1.40
2011 597.00 EUR 1.41
2010 540.00 EUR 1.37
2009 480.00 EUR 1.32
2008 411.00 EUR 1.09
2007 389.00 EUR 1.06
2006 370.90 EUR 1.11
2005 363.40 EUR 1.22
2004 303.50 EUR 1.10
2003 284.10 EUR 1.10
2002 267.70 EUR 1.08
2001 252.50 EUR 1.07
2000 257.50 EUR 1.11

Comments