Late filing of tax returns in Luxembourg: what are the consequences?

Haven't filed your Luxembourg tax return yet? Late filing can mean hefty penalties: up to 10% surcharge plus 0.6% interest per month.

Compliance with filing and payment deadlines for tax returns is a legal obligation in Luxembourg. A late filing or a complete failure to file can result in several financial penalties, which may be cumulative.

Below is a clear overview of the consequences of filing a tax return late and what you actually risk.

1. Late filing surcharge

When a tax return is not filed within the prescribed deadline, the tax office may apply a tax surcharge.

Amount of the surcharge

• Up to 10% of the tax assessed
• The amount depends in particular on the length of the delay and the taxpayer’s behavior

This surcharge is added to the tax normally due and directly increases the tax bill.

Special case: withholding tax on savings income

In the event of a late or incorrect declaration of an amount of €1,000 or more relating to withholding tax at source on interest (the “savings” directive), an automatic penalty of 0.5% of the shortfall may be applied to the paying agent.

2. Periodic penalty payment in case of non-filing

If the return is not filed at all, the tax authorities may go further by imposing a periodic penalty payment.

How does the penalty payment work?

1. Final reminder (formal notice with penalty)

The tax office grants a final deadline and informs the taxpayer that a penalty payment will be imposed in the event of inaction. The exact amount of the penalty is communicated in advance.

2. Imposition of the penalty

If there is no response within the new deadline, the penalty is officially imposed and notified in writing.

In case of persistent refusal

If the taxpayer refuses to file the return, the authorities are required to proceed with an estimated assessment, meaning a unilateral estimation of the tax due, which is generally unfavorable to the taxpayer.

3. Late payment interest

In addition to surcharges and penalties, late payment interest may be applied if the tax is paid late.

3.1 Late payment interest at the flat global rate

• 0.1% or 0.2% per month
• Applicable when the taxpayer benefits from a payment extension granted upon request

3.2 Late payment interest at the full rate

Late payment interest at the full rate of 0.6% per month is applied in the following situations:

• Failure to pay by the normal due date (end of the month following receipt of the tax assessment notice)
• Request for a payment extension submitted after the due date
• Payment extension granted exceeding 3 years

This interest is calculated:

• on the tax due
• and on the late filing surcharge

It also applies in the event of non-payment of a tax advance.

5. How can these consequences be avoided?

• File the tax return on time
• In case of difficulties, contact the tax office before the deadline
• Request a payment extension if necessary
• Use a solution such as taxx.lu, which guides you step by step and helps you avoid omissions and delays

Summary

Late filing is never trivial in Luxembourg. Even in the absence of fraudulent intent, the financial consequences can be significant. Anticipating, staying informed, and acting on time remain the best strategies to avoid penalties and surcharges.