Further changes announced for commuters
As of 2018, the tax reform will provide an aligned framework for both resident and non-resident taxpayers, resolving the different categories of taxation currently in place.
Minister of Finance Pierre Gramegna and Jean-Claude Bernardini, executive board member of the OGBL union, have announced further adjustments to Luxembourg's tax reform implemented at the beginning of the year.
The changes are addressing Luxembourg's commuting workforce and are due to become effective on January 1, 2018.
Last November the OGBL and OGBL unions gathered a list of six major problems the launch of the tax reform could bring. At the time, a working group was also created to focus on the reform and provide solutions to major problems.
As of 2018, the tax reform will provide an aligned framework for both resident and non-resident taxpayers, resolving the different categories of taxation currently in place.
Once the changes are implemented, Luxembourg's tax regime will also be aligned to the fiscal policies adopted by neighbouring countries.
Commuters will automatically be placed in class one as opposed to class two. This will bring changes to how tax return forms will be filed. In order to claim the tax class reserved for married couples, commuters will need to indicate their overall income.
It is important to note that 90 per cent of a taxpayer's income must be obtained in Luxembourg in order for a change in tax class to be granted.
A threshold of €13,000 will also be introduced in 2018 in relation to the net, non-taxable income obtained in Luxembourg.
The changes will apply to French and German commuters earning up to 90 per cent of their income in Luxembourg, Belgian commuters earning up to 50 per cent of their income in the Grand-Duchy or to all commuters who have a non-taxable income below €13,000.
(Reporting by Marco Thiltgen, translated by Roxana Mironescu)
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