Posted on 24 August 2024
Do you have to continue submitting your tax declaration every year in Luxembourg?
Have you already filed a tax declaration in Luxembourg? Discover whether you need to continue submitting on every year and what are the tax obligations you need to respect.
If you have started filing a tax declaration in Luxembourg, you might have asked yourself if you have to continue submitting it every year. The answer depends on your tax situation and on your obligations as a taxpayer. Here is everything you need to know:
1. Obligation for the Declaration: When is it necessary?
In Luxembourg, the tax declaration is not systematically obligatory for all taxpayers. However, there are certain conditions that render the declaration obligatory:
- the taxable income of a household exceeds 100.000€ annually
- in the case of a combination of several forms of remuneration where the taxable income exceeds 36.000€ for taxpayers in tax classes 1 and 2 and 30.000€ for taxpayers in tax class 1a
- if you are a non-Luxembourg resident, as they are taxed at a fixed rate
Or if your taxable income in Luxembourg is not subject to withholding tax, as for example business profits, rental income, income from transferable securities …
2. Why Continue Filing a Tax Declaration?
Even if you are not strictly obligated to submit a tax declaration every year, there could be advantages involved in continuing to do it:
- Tax optimisation: Filing a tax return allows you to benefit from various tax deductions (loan interest, special expenses, etc.) that could reduce your final tax bill.
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Refund of overpayments: If you have paid too much tax at source, filing a return could allow you to recover the excess.
3. When Can You Stop Filing Declarations?
If you are not submitted to one of the obligations to submit a declaration (for example, if your income is solely salary-related and below the taxable threshold), you could, in theory, stop filing tax declarations.
4. Consequences of Not Filing Declarations
If you are under an obligation to file a declaration and you do not submit one, you risk penalties for non-declaration or late declaration. Additionally, the tax administration may proceed to perform an estimate of your income, often less favourable than if you had done the declaration yourself.
