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LUXEMBOURG

Luxembourg tax law allows certain tax deductions for investments and costs incurred during a fiscal year (1 January to 31 December) that can significantly reduce your tax liability or result in a salary tax reimbursement.  To claim the maximum deductions for the deductible items set out below you must have actually paid these amounts on or before 30 December of the tax year.

If you have a taxable income above €100,000 (single) and €36,000 (both working) for the year you should hand in your 2010 tax return by 31 March 2011.  The amount of tax reimbursement resulting from your tax-deductible investments and costs will naturally depend on your tax class (single, married and number of children) and your annual declared income.  The maximum reimbursement that could result from investing in these products is 40.56%.

The maximum possible deductions for the year of 2010 are as follows:

ALLOWABLE DEDUCTIONS FROM LUXEMBOURG TAXABLE INCOME

We will we complete your tax return for you and at the same time ensure that you get the most out of your allowable deductions.

MORE INFORMATION ON THE TAX-DEDUCTIBLE INVESTMENTS AND EXPENSES

SAVINGS LIFE INSURANCE

You can deduct the premiums you pay for medical, any third party liability (RC personal and car but not comprehensive insurance) and life insurance policies.  Lump sum pay-outs, on maturity, from life insurance policies are tax-free.

PENSION POLICY

You can deduct the premiums of between €1,500 and €3,200 (according to your age) that you pay into a Luxembourg supplementary pension policy for a period of at least 10 years and receive an annuity at the of 65 that will be taxed.  If you employer offers a complementary pension scheme you can contribute another €1,200 per annum into this scheme, which is also tax deductible.  Pay-outs from complimentary pension schemes are tax-free.

COMPANY COMPLIMENTARY PENSION

If you make personal contributions to an employer pension plan, you can deduct your personal contributions up to a maximum annual amount of EUR 1,200

INTEREST PAID ON PERSONAL LOANS

You can deduct the interest you pay on a credit card, overdraft on a current account or personal loan you take out with a bank or a relative, on buying a car, going on holiday, buying furniture for your house, gambling in the casino or paying your back taxes.

INTEREST PAID ON MORTGAGE LOANS

You can deduct the interest you pay on a loan you take out to buy your home (not a holiday home).

CHILD MINDER/CRÈCHE/CLEANER

You can deduct the costs of a child minder.  If it is a recognised crèche you need to supply the invoices you received and paid.  If you employ a person at home to mind the children or clean the house the person must be registered with the Luxembourg social security.