In this section you will find out the different solutions and amounts you can deduct from your Luxembourg taxes.
If you want further clarification please contact us and we will be happy to respond.
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Tax is calculated based on your income bracket.
So the higher your income the more taxes you pay. However certain expenses can be deducted from your taxable income regardless of whether you are a resident or cross-frontier worker.
Deductible expenses include the costs of childcare, car mileage, car insurance, housing etc. which reduce your tax liability and increases your income.
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There are twon main types of expenses
- Everyday expenses: related to the costs of childcare, car insurance and housing etc. This category includes all expenses related to daily life that are not incurred for the purpose of tax deductions.
- Voluntary savings: this second type of savings allows you to subscribe to a savings plan and deduct it from your tax liability. Discover all the expenses you can deduct from savings plans and find out all about tax optimisation.
You can find the complete list of deductible expenses here
For cross-frontier workers
Contrary to popular belief, not all cross-frontier workers fall under the same taxation regime.
Deductible expenses for single people are practically the same for all cross-frontier workers.
Are you in a relationship? The total tax liability of your partner depends on their nationality.
Quite simply because countries such as Belgium, France and Germany have tax agreements with Luxembourg.
These agreements are different in each country. For example a Belgian cross-frontier worker who lives with a partner who works in Belgium has to pay more tax on their earnings than a French cross-frontier worker who lives with a partner who works in France.
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A tax return takes time and effort to complete. Weicker & Co will complete your tax return for you! Subscribe to one of our tax deductible products (life insurance, pension savings, property savings) from the company of your choice and we will complete your fully refundable tax return (value: €110).
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Tax treatment of insurance products for Luxembourg taxpayers
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Choosing insurance is important. Each situation is as unique as the individual. We are always available to provide information and help you in your choice with complete independence.
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Life, Death, Disability, Health, Accident or Third Party Car, Motorbike and Home Insurance can be tax deductible. As a Luxembourg taxpayer, you can actually deduct premiums for such insurance and make a saving.
Fill out the relevant section of your tax return without delay or register the amounts on your tax card.
Maximum deductible amounts
€ 1 344
Taxpayer with 1 child
€ 1 344
€ 2 016
Taxpayer with 2 children
€ 2 016
€ 2 688
Taxpayer with 3 children
€ 2 688
€ 3 360
To be able to deduct life insurance policies in the event it reaches maturity during your lifetime the contract must have a duration of at least 10 years.
For health and/or accident insurance these limits increase by €1500 if they provide for the payment of a daily allowance in the event of incapacity for work.
All lump-sums paid by life, death or accident insurance are tax exempt!
Products expressed in units of account (including mutual funds) have the same tax deduction rules as 'classic' policies.
These products can be deducted if they meet two conditions:
- Death benefit of at least 60% of the total premiums (with a minimum of 5 annual premiums)
- or 130% of the premiums paid up to death
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When the borrower takes out a temporary assurance on death with a single premium to cover a real estate loan or a mortgage, special maximum amounts are added to the normal limits.
|Taxpayer||Increased limit (1)||Higher increased limit
Between 30 and 50 (per year)
€ 50 and over
|Without children||€ 6 000||€ 480||€ 15 600|
|With 1 child||€ 7 200||€ 576||€ 18 720|
|With 2 children||€ 8 400||€ 672||€ 21 840|
|With 3 children||€ 9 600||€ 768||€ 24 960|
|With 4 children||€ 10 800||€ 864||€ 28 080|
|Per additional child||€ 1 200||€ 96||€ 3 120|
How to calculate the absolute limit per taxpayer
Weicker & Co is an Authorized broker with the Belgian FSMA under the reference 62429 and Belgian company number 0893.901.520. Our brokerage company is authorized to perform free service in Luxembourg.
- basic limit: €672 + €672 for joint taxation + €672 per dependent child
- allowance for single premium: sum of the single premium (without exceeding €3000) + €672 per child dependent
- additional allowance: 8% x number of years over 30 (age of borrower when policy taken out) x result of b.
Maximum additional amounts deductible.
|Annual deduction||Annual deduction|
|Under 40||€ 1 500||48||€ 2 100|
|40||€ 1 750||49||€ 2 100|
|41||€ 1 750||50||€ 2 600|
|42||€ 1 750||51||€ 2 600|
|43||€ 1 750||52||€ 2 600|
|44||€ 1 750||53||€ 2 600|
|45||€ 2 100||54||€ 2 600|
|46||€ 2 100||55||€ 3 200|
|47||€ 2 100||between 55 and 75||€ 3 200|
There are several conditions to meet in order to take out this insurance. These are related to the new Article 111a of the Tax Code (L.I.R.)
- Minimum duration of 0 years
- Annuities and lump-sums must be paid at the age of 60, at the earliest, and the age of 75, at the latest;
- At maturity you receive a maximum lump-sum of 50% of the accrued savings, the remainder is converted into a monthly life annuity.
- In the event of death: the beneficiaries can receive the accumulated savings
- A pension makes it possible to substantially increase the deductible amount based on an annual limit which depends on the subscriber's age at the start of the tax year. When jointly taxed spouse each buy a pension product, the deductible amount is calculated individually by taking into account their age at the start of the tax year;
- Any early repayment made before the age of 60 for reasons other than disability or serious illness will result in a tax adjustment;
- Both standard products with a minimum interest rate as well as unit of account products are permitted. However specific rules have been issued for the latter by Grand-Ducal regulation. Stocks calculation
|Age at the start of the tax year||Maximum overall portion of shares in the total underlying assets.|
|Under 45||no limit|
|from 45 to 49||75% of accrued savings|
|from 50 to 54||50% of accrued savings|
|55 and over||25% of accrued savings|
- the taxpayer can have multiple products but it is not possible to transfer accumulated savings from one product to another
- tax advantages: the portion paid as a lump-sum is only taxed at half the overall rate of income tax and half of all monthly annuities are exempt from tax.
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