The end of the year is approaching: what can I deduct in my 2017 tax return ?
All Luxembourg residents can benefit from tax deductions in their tax return.
Similarly, cross-border commuters who are not residents of Luxembourg but work there can also benefit from tax deductions provided they are assimilated to Luxembourg residents. For more information, click on the link :
The most common tax deductions are :
- the costs of obtaining either a flat rate up to €540, or on the basis of actual costs such as :
- professional moving costs
- fees for professional development courses and books/publications specialized in the professional activity ;
- special professional clothing costs ;
- expenditure for work instruments used more than 90% for salaried activity ;
- subscriptions to a professional chamber or a union.
- travel expenses up to a flat rate of max. €2,574 (i.e. 26 remote units at €99) ;
- within certain limits, tax-exempt income such as wages for night work, Sundays and public holidays, overtime, meal vouchers, gifts, life insurance capital, 50% of life annuities, birth and parental leave allowances, interest subsidies on home loans (max. €3,000) and on consumer loans (max. €500) (ceilings doubled) in the event of collective taxation ;
- special expenses such as :
- under certain conditions, alimony following divorce up to max. 24.000€ ;
- up to €672 per person in the household :
- personal loan interest expense ;
- insurance contributions and premiums in the event of death (including death insurance for the mortgage*) or life insurance (insurance for a period of more than 10 years) ;
- Civil Liability insurance premiums: Auto RC, Home RC, Private Life RC, etc.
contributions paid to mutual benefit societies such as the medical and surgical fund, complementary hospitalization, “health” insurance,…
- retirement savings premiums up to max. €3,200 per single taxpayer or per married or civil partnership spouse subject to the following conditions :
minimum subscription period : 10 years ;
- age at the end of the contract : min. 60 years and max. 75 years old ;
- early repayment: excluded except in the case of serious illness or disability ;
- since this year, it is possible to receive 100% of the capital due at the end of the contract without partial obligation to pay an annuity.
contributions paid to approved housing savings funds up to €672 per person in the household. Since 2017, this ceiling has been doubled if the subscriber is between 18 and 40 years old (condition to be fulfilled only by one of the married or PACS spouses) ;
- employee social security contributions ;
- up to max. €1,200, the personal contribution paid by the employee into a supplementary pension scheme set up by the employer ;
- donations and donations of min. €120 and max. €1,000,000 with a max. 20% of the total income taxable to public utility organizations and recognized by Grand-Ducal regulation,…;
- under certain deductible ceiling conditions depending on age and dependent children, a single death insurance premium for a home loan in relation to his personal home may be deductible.
- interest on mortgages for the main residence up to max. €2,000 per person in the household (for the year of occupation and the following 5 years), €1,500 (the subsequent 5 years) and €1,000 from the 11th year ;
- extraordinary expenses, in particular for :
- childcare and domestic costs up to max. €5,400 per year (€450 per month) ;
- dependents of child(ren) who are not part of the household up to max. €4,020 per child.
In addition to these possible tax deductions, taxpayers who are married or in PACS collective taxation benefit from the joint allowance (also called extra-professional allowance) of €4,500 per year (€375 per month) provided that they both receive income taxable from a professional activity (commercial, agricultural and forestry profit, liberal profession profit or net income from salaried employment).