Publié le 06 September 2024
Understanding why your spouse is taxed at a flat rate of 15 % in Luxembourg
Find out why your spouse is taxed at a flat rate of 15 % in Luxembourg and how this may affect your tax return. Learn how to adjust your deductions at source to avoid unexpected payments.
For married couples residing in Luxembourg, it is common for one spouse to be subject to tax class 2, while the other is taxed at a flat rate of 15 %. This fixed rate does not vary according to income, which can lead to significant tax adjustments.
If your average tax rate exceeds 15 %, the amount deducted at source from the salary of the spouse taxed at the flat rate will be insufficient. You could therefore be forced to pay a significant sum when filing your tax return.
In the year following your first tax return as a married couple, the tax authorities may introduce quarterly advances to avoid having to pay a significant amount again. However, this option is not always available.
Here are a few examples to illustrate the situation (for simplicity’s sake, we are assuming that the extra-professional allowance has already been taken into account) :
Example 1 :
Cédric and Delphine, a married couple living in Luxembourg, have different tax regimes. Cédric is taxed at tax class 2, and Delphine at a flat rate of 15 %. Without tax advances, the year could progress like this :
Cédric’s salary :
- Taxable amount : 100 000 €
- Tax deducted at source : 16 747 €
Delphine’s salary :
- Taxable amount : 100 000 €
- Withholding tax : 15 000 €
Total household taxable income : 200 000 €
Tax due : 58 875 €
Tax paid at source : 31 474 €
Amount to be paid : 27 401 €
Example 2 :
Paul and Julia, also married in Luxembourg, have paid advance tax :
Paul’s salary :
- Taxable amount : 60 000 €
- Tax deducted at source : 4 530 €
Julia’s salary :
- Taxable amount : 80 000 €
- Withholding tax : 12 000 €
Total household taxable income : 140 000 €
Tax due : 33 837 €
Tax paid at source : 16 530 €
Tax advances : 16 000 €
Amount to be paid : 1 307 €
Example 3 :
Joao and Philipp, married, residing in Luxembourg, without tax advances :
Joao’s salary :
- Taxable amount : 35 000 €
- Withholding tax: 841 €
Philipp’s salary :
- Taxable amount : 50 000 €
- Withholding tax : 7 500 €
Total household taxable income : 85 000 €
Tax due : 11 569 €
Tax paid at source : 8 341 €
Amount to be paid : 3 228 €
If you find yourself in this situation, you may ask to be taxed in tax class 1 at source, as a single person. Although this will result in a reduction in your net monthly income due to an increase in withholding tax, it reduces the risk of having to pay a large sum when you file your tax return. To do this, simply complete form 166.
