Posted on 31 July 2023
Crossborder worker : Being considered a Luxembourg resident: what you need to know
Cross-border workers, learn how to be considered a resident in Luxembourg and the tax implications involved.
Every day, more than 200,000 people cross the border to work in Luxembourg.
But how are they taxed as non-residents?
Do they benefit from the same tax advantages as residents?
To benefit from the same advantages and deductions as residents, you must be treated as a Luxembourg resident when you file your tax return. This means that cross-border commuters can benefit from the same advantages.
Please note: this also means that you must declare your worldwide income, both Luxembourg and foreign. Your foreign income will be taken into account when calculating the global tax rate, but this rate will only apply to Luxembourg income.
To be considered a resident, you must meet at least one of the following three conditions:
- At least 90% of the household's income is generated in Luxembourg.
- The household receives less than €13,000 net of income from abroad (outside Luxembourg).
- For Belgian residents only, if more than 50% of professional income is generated in Luxembourg.
If at least one of these conditions is met, you may be treated as a Luxembourg resident. For married or civil union couples, at least one of the partners must meet one of the three conditions.
If you do not meet these conditions, only your Luxembourg income will be taken into account, with no possibility of deductions.
Don't forget that married non-residents have a fixed tax rate, equivalent to tax class 2. They must also declare their income annually in Luxembourg to adjust the rate according to their situation.
