This montly tax withholding mail («Taux de Retenue sur Traitements et Salaires» or RTS letter)  is sent to the married or in civil partnership crossborder workers to define their tax withholding rate percentage to be noted on their 2018 tax card. With this tax rate can be calculated the monthly tax withholding on your salary payslips starting on January 2018.

Provided you are in the conditions to be treated like a Luxembourgish resident  (for more infos, read article « In 2018, married crossborder workers will face new tax rules »), you have the choice between three different options :

• Option 1: agree with the tax withholding rate proposed by the tax administration expresses;
• Option 2: ask for a tailor-made rate by providing the tax administration with your jncome in Luxemburg and abroad (incl. income earned by your spouse) ;
• Option 3: no answer to the mail with automatic registration of class 1 on your 2018 tax card.

Note that the tax administration will not mention anymore your tax class (1, 1a or 2) on your tax withholding card but directly your tax withholding rate percentage.

Between option 1 and 2, option 2 (tailor-made withholding tax rate percentage) should be preferred if you do not wish to repay an important amount when receiving your 2018 tax statement (for most of the cases, to be received in 2019).

Actually, the closer to your own 2018 Luxembourg income is the income earned by your spouse abroad in 2018, the more you will repay when receiving your annual tax statement in 2019.

In some cases, the pure individual taxation will be prefered to the collective way of taxation.

Fore more information, read « In 2018, income taxation will be more flexible in Luxembourg »

As independant tax consultants, we can advise you for optimizing your tax relieves and estimate your 2018 tailor-made rate wothholding tax rate percentage.

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