Is it possible to benefit from collective taxation in Luxembourg if your spouse is not resident?

Yes, under certain strict conditions.

A resident taxpayer may apply for collective taxation with his non-resident spouse, provided that the resident spouse earns at least 90% of the household's professional income in Luxembourg.

Examples:
Sarah lives and works in Luxembourg (income: €60,000). Her husband lives in Italy and receives a small pension of €3,000.
60,000 / (60,000 + 3,000) = 95%
Result: Collective taxation possible.

Sophie lives and works in Luxembourg (income: €70,000). Her husband lives in France and earns a salary of €25,000 in France.
70,000 / (€70,000 + 25,000) = 73.7%
Result: the 90% threshold is not reached, so collective taxation is refused and the resident will be taxed individually, in tax class 1.

Updated on: 27/06/2025