Do you have to file a tax return in Luxembourg?

Have you just moved to Luxembourg or have you been a resident for a short time? Filing a tax return isn’t automatic for all taxpayers, but it may be required, recommended, or beneficial depending on your situation.

In Luxembourg, income tax is generally withheld at source by the employer. However, this does not necessarily mean that your tax situation is fully settled. Additional income, foreign income, family status, deductible expenses, or a change in circumstances may make filing a tax return necessary.

With advice from Séverine, a tax expert at Neofisc, here are the key points you need to know to understand whether you must file a tax return in Luxembourg, by when, and with what supporting documents.

Withholding tax: why a tax return may still be necessary

Luxembourg applies a withholding tax on wages. In practice, a portion of the tax is deducted each month by the employer before the net salary is paid.

This system simplifies the process for employees, but it does not always take into account the taxpayer’s full tax situation. Withholding tax is based primarily on the information listed on the tax withholding form: tax bracket, family status, applicable rate, or any tax allowances.

As Séverine, a tax expert at Neofisc, points out , “withholding tax is always provisional.” It may therefore need to be adjusted if you receive other income, if your family situation changes, or if you wish to claim certain deductible expenses.

To better understand how the tax system in Luxembourg works overall, also check out our practical guide to taxation in Luxembourg for expats and newcomers.

Who is required to file a tax return in Luxembourg?

Contrary to what one might think, filing an annual tax return in Luxembourg is not automatically required for all taxpayers.

However, many residents are required to file a return or have an interest in voluntarily filing one to regularize their status or request a tax refund.

Situation	Mandatory filing?	Procedure
Employee with a single source of income in Luxembourg	Not always	Check whether a voluntary declaration might be advantageous.
Additional income	Often yes	Report the relevant income according to its nature.
Rental income in Luxembourg or abroad	Yes, in many situations	Report real estate income and keep supporting documents.
Foreign income	Depending on the situation	Report it to correctly determine the tax rate.
Deductible expenses or charges	Not always	Filing a tax return may reduce your tax liability or result in a refund.
Request from the Direct Tax Administration	Yes	Comply with the request and the specified deadline.

When is filing a tax return optional but beneficial?

Even when it is not mandatory, filing a tax return can be beneficial. It allows you to claim certain expenses, rectify a situation, or request a refund of overpaid taxes.

This applies in particular to taxpayers who have incurred deductible expenses, experienced a change in family or employment status , received variable income, or gone through a period of unemployment, illness, or parental leave.

Filing a tax return can also be useful for claiming specific expenses such as certain insurance premiums, alimony, loan interest, childcare costs, or other expenses recognized by the tax authorities.

To identify the relevant expenses, consult our guide on tax deductions in Luxembourg.

What income must be reported in Luxembourg?

The tax return does not apply solely to wages earned in Luxembourg. Depending on your situation, other types of income must be reported so that the tax authorities can correctly calculate your tax liability.

Income earned in Luxembourg

Luxembourg income may include, in particular, wages, pensions, self-employment income, rental income, investment income, or taxable capital gains.

If you have multiple sources of income, a specific family situation, or a side job, it is important to verify your reporting obligations.

Income earned abroad

Expatriates living in Luxembourg may retain income in their country of origin or in another country: rental property, bank interest, dividends, retirement pensions, or other investment income.

This income may need to be reported on the Luxembourg tax return, even if it has already been taxed abroad. As Séverine explains, “it is included in a notional base to calculate an average tax rate.”

The principle is not to tax the same income twice, but to take into account the taxpayer’s overall situation to determine the rate applicable to taxable income in Luxembourg.

What supporting documents should you keep for your tax return?

The tax authorities do not always request all supporting documents at the time of filing the return. This does not mean they are unnecessary.

You must be able to provide them if requested, particularly if you are claiming tax deductions or reporting a special circumstance.

Type of document	Examples	Why keep them?
Income	Pay stubs, pensions, rental income, foreign income	To substantiate the amounts reported.
Deductible expenses	Insurance, retirement savings, loan interest, childcare expenses	Claim the deductions to which you are entitled.
Family situation	Marriage, domestic partnership, dependent children, child support	Ensure your tax situation is properly taken into account.
Foreign assets or income	Foreign tax notices, real estate income, dividends, interest	Avoid inconsistencies or requests for additional information.

“If the tax authorities request documents and you don’t provide them, they won’t take your deductions into account,” Séverine reminds us. It is therefore recommended that you prepare a complete tax return every year.

What is the deadline for filing your tax return?

In Luxembourg, the income tax return must generally be filed by December 31 of the year following the tax year in question.

For example, the return covering income for year N must be filed by December 31 of year N+1.

This deadline allows time to gather the necessary documents, but you shouldn’t wait until the last few weeks to prepare your return. As Séverine recommends, “We have a year to prepare our return, so let’s fill it out calmly.”

How do you file your tax return in Luxembourg?

The return can be filed using the designated form, specifically Form 100 for individuals, or online via MyGuichet.lu when the taxpayer’s situation allows.

Filing online allows you to complete the return with step-by-step guidance and submit the application to the tax authorities. However, certain specific situations may require the use of a paper form or assistance from a professional.

To understand the steps involved in filing, consult our practical guide to filing income tax returns in Luxembourg.

What are the consequences of an omission or delay?

Failure to meet tax obligations may result in late payment interest, financial penalties, or additional requests from the tax authorities.

Failure to pay taxes by the due date may result in late payment interest. If the tax authority sends you a request or sets quarterly advance payments, it is important to respond on time.

“You should always comply with the tax authority’s requests, even if you plan to contest them: pay first, contest later,” advises Séverine. This cautious approach helps avoid escalating a dispute or incurring additional fees.

Tax guides to consult based on your situation

• Would you like to understand how the tax system in Luxembourg generally works?
• Do you need to file your tax return?
• Do you want to understand withholding tax and your tax form?
• Do you want to know the main tax deductions available?
• Do you want to better understand personal income tax in Luxembourg?
• Do you want to know the tax implications of marriage or civil partnership?

FAQ: Tax Returns in Luxembourg