The second wave of new tax rules will come into force in tax year 2018.

By default, married or in civil partnership crossborder workers will be registered in tax class 1 from tax year 2018 (i.e. the same tax class as the one for single taxpayer).

Under which conditions could you opt for being assimilated to a Luxembourg resident ?

For keeping their more favourable tax class 2, the married or in civil partnership crossborder workers must ask for being assimilated to a Luxembourg resident (in other words, being treated like a resident of Luxembourg) and comply therefore with one of the two following rules :

• Principle at least 90 % of your world income is taxable in Luxembourg*;
• New measure : if you have other net income which is non-taxable in Luxembourg, up to an amount of € 13,000 max.
  • Example:
    • Luxembourg taxable income: €85,000 and income not taxable in Luxembourg: €12,000
    • Total worldwide income: €97,000 => taxable in Luxembourg: 88%
    • As < 90% of worldwide income taxable in Luxembourg => principle: tax class 1
    • Based on new measure: still tax class 2 as non-taxable income < €13,000.

* This condition must be filled individually by only the spouse who is working in Luxembourg or collectively (taken into account all revenue in Luxembourg or abroad).

For the Belgian crossborder workers only : they have to earn at least 50% of their professional income in Luxembourg to be tax assimilated to Luxembourg residents.

What are the consequences of the tax assimilation ?

You have to declare your entire income earned in Luxembourg and abroad (even if the Luxembourg does not have the tax right on this income).

By double taxation conventions, this foreign income is tax-exempt in Luxembourg but is taken into account for calculating a global effective tax rate (based on the household’s worlwide income).

Practically, positive foreign income results to a higher taxation on Luxembourg income and a negative foreign income reduces the tax burden in Luxembourg.

By choosing to be tax assimilated, married or in civil partnership taxpayers can benefit from deductions and relieves of taxation. For more information, click on « Approaching end of year, what may I deduct in my tax return ? »

Based upon your personal tax situation, we can:

• simulate your taxation by opting for a collective taxation or a pure individual taxation ;
• optimize our tax return by advising you on the various tax relieves (special expenses and extraordinay costs ;
• complete your annual tax declaration.

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