Assimilation to a resident

• How can I be assimilated to a resident taxpayer?

  To be considered a resident, you must have met at least one of the following three conditions: At least 90% of the household income is generated in Luxembourg. For the purposes of calculating this percentage, the first 50 days worked abroad are treated as Luxembourg income (50 days of home office work, for example). The household earns less than €13,000 net income abroad (excluding Luxembourg). For Belgian residents only, if more than 50% of professional income is earned in LuxembourgFew readers

• What are the advantages of being assimilated to a resident?

  Assimilation allows the non-resident taxpayer to benefit from the same advantages as the resident. Being treated as a resident offers the possibility of deducting a part of : special expenses extraordinary expenses or to benefit from a single-parent tax credit (which can lead to tax savings). However, this assimilation to resident status is not always the most advantageous tax option, as in some cases the deductions do not provide a sufficient tax advantage compared to the inFew readers

• Is outstanding balance insurance paid in France also deductible?

  Yes, French premiums are fully deductible, as long as you can provide an annual certificate to prove the amount of premiums paid and you are treated as a Luxembourg tax resident.Few readers

• Can I deduct insurance taken out in a foreign country?

  If you qualify as a Luxembourg tax resident, you can deduct your insurance premiums.Few readers

• Can I deduct the cost of a foreign health insurance ?

  Yes, premiums for a mutual insurance company are deductible, as long as you can provide an annual certificate to justify the amount of premiums paid and you are treated as a Luxembourg tax resident.Few readers

• What does it mean to be ‘treated as a resident taxpayer’?

  Tax assimilation allows cross-border commuters to benefit from the same tax deductions as Luxembourg residents when they file their tax returns. To be assimilated to a Luxembourg resident, you must satisfy at least one of the following three conditions: Majority Luxembourg income : At least 90% of the household's annual income must come from Luxembourg. For this calculation, the first 50 days worked abroad (e.g. home office) are considered as days worked in Luxembourg. Limited foreign iFew readers

• What does the warning message about the assimilation of resident taxpayers mean and what should I do?

  The assimilation alert message appears on your account when the system detects that you do not automatically meet the criteria to be considered a Luxembourg tax resident. This has a direct impact on your taxation, as assimilation determines your entitlement to certain tax deductions. To be treated as a Luxembourg tax resident, you must meet at least one of the following three conditions: At least 90% of your household income is generated in Luxembourg. The calculation of this percentage inclFew readers

Married cross-border workers

• How do I get a fixed rate?

  To do this, you need to submit a request using form 166. You can download it free of charge here.* You should also include a copy of your last three payslips and, if necessary, any proof of other income. For more information, please contact your relevant RTS Office. You can find your RTS Office by using our free simulator *Unfortunately the form is only available in FrenFew readers

• When is the fixed rate advantageous?

  The fixed rate is advantageous when there is a significant difference in salary between the two spouses. If one spouse earns income in Luxembourg and the other abroad (Belgium, for example), the income from Luxembourg must be higher than the income from Belgium. If this is not the case, opting for the Luxembourg rate would not be advantageous, as it would only increase your tax rate! In this case, it is better to remain in tax class 1.Few readers

• How is the fixed rate determined?

  Along with form 166, you will need to attach your last 3 payslips (for both spouses). The tax authorities will determine the applicable tax rate on the basis of the spouses' incomes and the deductions available to the couple. The aim is to adjust the rate as closely as possible to your income.Few readers

• What are the disadvantages of the fixed rate?

  If you opt for the fixed tax rate, you will have to file your tax return in Luxembourg every year. This is because tax will be regulated on the basis of the tax return. Once your tax return has been processed, your tax rate may be adjusted upwards or downwards. The tax rate is based on your income for the previous year. So if your salary rises or falls during the year, the tax adjustment when you file your tax return can sometimes be substantial. To avoid this, we recommend that you requesFew readers

• What is a fixed tax rate ?

  A fixed tax rate refers to a tax percentage that is deducted directly at source from your salary. For married Luxembourg residents : one of the two spouses (usually the one with the higher income) is taxed according to tax class 2, while the other receives a fixed tax rate of 15% at source on their salary. For married cross-border commuters : the fixed tax rate is the equivalent of tax class 2 applied at source. This tax rate depends on your income and is not always automatically aFew readers

Home-Office

• Home office: tax and social security rules, etc.

  Concerning the tax threshold For Belgium, France and Germany, the tax tolerance threshold is 34 days. After this threshold, the remuneration corresponding to the teleworking days becomes taxable in the country of residence. Example: Paul lives in Belgium and teleworks 60 days in 2024. The remuneration for these 60 days corresponds to 25,000 euros. These 25,000 euros will be exempt in Luxembourg and fully taxable in Belgium. Concerning the social security threshold Cross-border commutFew readers

• Does home office affect assimilation?

  Yes, home office has an impact on assimilation. To be considered a resident, you must meet at least one of the following three conditions: At least 90% of the household income is generated in Luxembourg. For the purposes of calculating this percentage, the first 50 days worked abroad are treated as Luxembourg income (50 days of teleworking, for example). The household earns less than €13,000 net income abroad (excluding Luxembourg). For Belgian residents only, if more than 50% of prFew readers

• Where do I indicate the amount for overtime home office days spent abroad?

  Indicate the amount corresponding to the excess home office days in the "Salaries" form under "Exemptions" in the "Amount for home office days abroad" field.Few readers

• How can I indicate household and childcare costs as a French cross-border commuter?

  For French cross-border commuters, you should deduct the tax credit you received in France. Even if you have no income from France, you are required to file a French tax return. This is an obligation for French residents, but it can be advantageous for you if you have incurred childcare and/or household expenses. What deductions are you entitled to? Childcare costs You are entitled to a 50% tax credit, capped at €1,750 per year per child under 6. Example Thomas and Jeanne haveFew readers

• Which documents should I upload for income from France?

  There are two ways of proving your French income: Add a copy of your French tax return Add a copy of your most recent payslip, showing the total for the year.Few readers