20. Tax assessment and advance payments

The tax assessment notice is the official document issued by the Administration des contributions directes (ACD) after processing your tax return. It specifies whether you must pay an additional tax amount or whether you are eligible for a refund.

Timeframe for receiving the tax assessment notice

In general, the processing and delivery of the tax assessment notice can take from a few weeks to several months, or even several years, depending on the complexity of your return. However, the administration legally has a period of 5 years to review and validate your return.

You will receive the notice:

• By post at your address,
• Or electronically in your MyGuichet.lu account, if you have activated digital delivery.

What does the tax assessment notice include?

The breakdown

The breakdown details the payments made and any refunds or balances due. It allows you to check whether you are entitled to a refund or whether an amount remains payable. This document is essential to understand the final outcome of your taxation.

The income tax statement

This statement confirms the data taken into account.

It summarizes the following elements:

• Your declared income (salaries, pensions, rents, investment income, etc.),
• Your tax deductions (loan interest, insurance, etc.),
• The net taxable income retained by the administration,
• The calculation of the tax due based on your tax class,
• The amount already withheld at source or paid as an advance,
• The balance due or the amount refundable.

"Determination of the global tax rate" (in case of foreign income)

If you have declared foreign income, you will also receive a document entitled "Determination of the global tax rate".

This document calculates your effective tax rate by taking into account all your income, including income exempt in Luxembourg thanks to tax treaties. This rate is then applied only to your taxable income in Luxembourg, ensuring fair and balanced taxation.

Payment and deadlines

After receiving the tax assessment notice, you generally have one month to pay the amount due. After this period, late payment interest may apply. It is therefore crucial to respect payment deadlines to avoid penalties.

If the tax assessment notice indicates that you are entitled to a refund, it is important to verify the IBAN you provided to the administration. The payment is generally made within two weeks.

What to do if you contest the notice?

You have the right to contest the tax assessment notice by filing a claim:

• Deadline: within 3 months from the date of receipt of the notice,
• Method: by post or by email to your tax office
• It is recommended to attach all supporting documents and clearly explain the disputed issue.

Tax advances

In Luxembourg, some taxpayers are required to pay part of their tax before even filing their official tax return: these are tax advances.

Taxpayers subject to tax advances

• Married resident couples where both spouses earn income in Luxembourg and faced a significant tax adjustment the previous year.

These advances are generally spread over the year in four payments (March, June, September, and December).

Payment terms

If you are concerned, the Administration des contributions directes (ACD) will send you a letter indicating:

• the amount to be paid each quarter,
• the payment deadlines: March 10, June 10, September 10, and December 10.

Adjustment in case of a change in situation

If your income decreases, if you lose a job, or if new deductible expenses arise, it is possible to request an adjustment of the advances.

You simply need to send a letter to the tax office with the necessary supporting documents (new contract, payslips, proof of expenses, etc.).

Consequences of non-payment

Failure to pay advances on time may result in:

• late payment interest,
• or even more severe penalties if the situation persists.

Use of tax advances in the return

When filing your annual return, you do not need to indicate the amount of tax advances. The tax administration automatically takes them into account when calculating your final tax.

• If the advances paid exceed the tax due, the excess will be refunded to you.
• If they are insufficient, you will be required to pay the balance.

It is still recommended to check the amount indicated on your breakdown to ensure that it correctly reflects your payments and situation.