Is foreign income taxed in Luxembourg?

If you are resident in Luxembourg, you must declare all your income, both from Luxembourg and abroad.

For cross-border commuters, if you wish to be treated as a Luxembourg tax resident, you must also declare all your income in Luxembourg, i.e. your Luxembourg income as well as your foreign income.

Important: You must indicate the different amounts in euros.

How can I indicate income in another currency?

How are they taxed?

Don't panic, double taxation is prohibited within the European Union In accordance with the double taxation agreements between the countries concerned, foreign income is taken into account when calculating your tax rate.

This tax rate is then applied solely to your Luxembourg income.

Example with foreign income:

Luxembourg income: 50.000 €
Foreign income: 30.000 €

Total income: 80.000 €

The average tax rate in tax class 1 on the 80.000 € for 2023 is : 26%

This 26% is then applied solely to your Luxembourg income.

50.000 * 26% = 13.000 €

The 7% contribution to the employment fund must also be calculated.

13.000 * 1,07 = 13.910 €

The total amount of tax is therefore 13.910 €

Example without foreign income:

Luxembourg income: 50.000 €

The average tax rate in tax class 1 for 2023 is : 18,21%

The total amount of tax is therefore 9.743 €

Updated on: 26/04/2024