Posted on 01 August 2024
Tax classes in Luxembourg
Discover the different tax classes in Luxembourg. This comprehensive guide explains the tax categories for residents and non-residents to optimize your tax return.
Luxembourg, renowned for its attractive tax system, offers a tax class structure that can seem complex at first glance. Understanding these classes is crucial to optimize your tax return and avoid unpleasant surprises. This article aims to demystify the different tax categories for residents and non-residents of Luxembourg.
Tax Classes in Luxembourg: An Introduction
The Luxembourg tax system is mainly divided into three tax classes, determined based on family situation and residency status. Here is an overview of the different classes:
Class 1: Single Individuals
Class 1 applies to taxpayers who are:
- Single
- Divorced
- Separated
- Widowed without dependent children
This class also includes partners in a civil partnership (PACS) without dependent children.
Class 1a: Single Individuals with Dependent Children
Class 1a is intended for:
- Single parents with at least one dependent child
- Widowed taxpayers with dependent children
- Divorced or separated taxpayers with dependent children
Class 2: Married Couples and PACS Partners
Class 2 is for:
- Married couples
- PACS partners who file a joint tax return
Non-Residents: How Are They Taxed?
Non-residents, although working in Luxembourg, are subject to different tax rules. They can choose between two options:
- Being taxed at source on their Luxembourg income
- Opting for assessment taxation, similar to that of residents, if at least 90% of their income comes from Luxembourg
Married non-residents can request to be taxed as residents (Class 2), which can offer substantial tax benefits.
For personalized assistance with your tax return, trust taxx.lu, your expert partner in Luxembourg taxation.
