Posted on 29 July 2024
PACS in Luxembourg in 2023
Discover the tax benefits of the civil partnership (PACS) in Luxembourg in 2023. Take advantage of joint taxation and deductions to optimize your financial situation with this alternative to marriage.
The Civil partnership (PACS) is an alternative to marriage that allows two people to live together while receiving legal recognition.
Since its introduction in 2004, PACS has attracted many couples in Luxembourg, largely due to the tax benefits it offers. In 2023, let's take a closer look at the tax implications of PACS and how it can optimize couples' financial situations.
1. Initial Taxation of PACS Partners
In Luxembourg, PACS partners initially retain the tax status of "single" on their monthly pay slips. This means they are classified under tax class 1 or 1a, which is the tax class applicable to single individuals and those living alone with a child.
2. Joint Tax Return
When they choose to file a joint tax return, PACS partners can access the same tax benefits as married couples. This includes the possibility of being classified under tax class 2, which offers reduced tax rates and larger tax deductions.
3. Tax Benefits of PACS
PACS offers several tax benefits that can significantly improve the financial situation of couples:
Allowances and Deductions:
PACS partners can benefit from allowances on taxable income and deduct certain expenses, such as specific insurances, childcare costs, or loan interest for the purchase of a main residence. Since some deductible caps are doubled, it is often very advantageous to file a joint tax return!
PACS partners can benefit from allowances on taxable income and deduct certain expenses, such as specific insurances, childcare costs, or loan interest for the purchase of a main residence. Since some deductible caps are doubled, it is often very advantageous to file a joint tax return!
Do you want to file your 2023 tax return as a PACS couple? Don't hesitate and use taxx.lu to determine the best tax options for your situation!
