In Luxembourg, the employees income tax is directly deducted at source by the employer.
To deduct the tax at source and/or pay the tax credit to the employee, the employer has to detain a tax card. The employee thus has to give it back to his employer with reception by administrative departments.
The tax card or tax deduction card allows to identify what the employee’s or the pensioner’s tax class is.
Every employment or pension is subject to a tax card.
These tax return forms are emitted by the Administration of Direct Taxes once a year at the beginning of the year or in case of change of personal situation (wedding, childbirth…).
The resident taxpayer employee who gets a job in Luxembourg for the first time receives his tax reduction card from the Administration of Direct Taxes without intervening, after being affiliated to the CCSS directly by his employer within 30 working days maximum.
All the tax return forms are necessarily forwarded by postal mail to the employee’s residence.
Even if salaries are deducted at source, you have to declare all your income once a year with the tax authorities. To know more about tax return in Luxembourg, click here.