How to get a tax deduction in Luxembourg

Luxembourg offers several tax deductions, and taxpayers have the right to claim them. This guide will cover the main reasons for deductions and the requirements for applying for them.

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A tax deduction is a legal way to reduce the amount of taxes a taxpayer owes. To qualify for a tax deduction, certain criteria must be met. The deduction is considered when filing a tax declaration and is granted if certain criteria are met.

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Deductions for categories:
salaried employees
self-employed and free professionals
car owners
people with children
Tax deduction options for Luxembourg residents
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A tax declaration is an important document for the IRS. It allows you to track your income and expenses and document your allowable exemptions and deductions.

You can complete a tax declaration on paper or online. There are no specific requirements; the important thing is to fill it out accurately and without errors.

To automate the process, you can use online services such as or hire a professional accountant to help you fill out the document.

If you fill it out on your own, you have to read it very carefully. There are notes under almost every field. Most of the time they will also tell you about compensation amounts you can get on every tax item.

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There are several tax deductions in Luxembourg. For your convenience, we have divided them into the main categories. You can set the necessary criteria using the filter system.

An employee (resident or non-resident) can receive a tax deduction in the following categories:

Fixed payments and pensions
Social security contributions

Taxpayers are also allowed to deduct extraordinary expenses. Extraordinary expenses are those that cannot be avoided but are not the same for all people in the same income or social category.

Procurement or transaction costs are not considered extraordinary expenses.

Full extraordinary expenses are:

Child care expenses
Expenses for domestic services
Aid and care expenses
Maintenance, education, and vocational training of close relatives taken into the household of the person paying for their support
Child maintenance/support payments
Other expenses that may be deducted

With all the new variables in mind, carefully fill out the return, paying particular attention to the sections where tax deductions are shown. These lines usually contain notes and comments from the preparer.

It is recommended that you consult a professional accountant who can advise you on controversial issues

After making sure the document is completed correctly, submit it to the IRS. Nothing more is required of you. After some time (up to 30 days on average), you will receive an official letter from the IRS.

This letter will indicate the total tax base, the amount of mandatory payments, and the amount of compensation to which you are entitled. A tax deduction in Luxembourg is essentially a large refund that you receive sometime after the tax has been paid.

If there is an error in the tax office's calculations, you have the right to appeal the inspector's decision. You have 90 days from the date you receive the calculation sheet to do so.

Keep in mind, however, that as with appeals, the outcome can be in your favor or against you. There have been cases when the tax office has found additional errors in the calculations and the end has received an even larger amount than before.


Frequently Asked Questions (FAQ)

Can a foreigner get a tax deduction?

If I claim a tax deduction, does that mean I pay less?

Can I argue with the IRS if it is wrong?

Should I contact an accountant?

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We took photos from these sources: Kelly Sikkema на Unsplash

Authors: Aleksandr, Kadriia
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