Married cross-border workers face 'untenable' October tax deadline

Married couples, who work in Luxembourg but live across the border in a neighbouring country, have until the end of this month to determine their Luxembourg tax rate for 2018.

Trade union Aleba described the deadline as "simply untenable" and asked the tax authorities to push it back by a month until November 30.

Aleba, which represents financial sector workers, including thousands of cross-border workers, said taxpayers needed longer to respond adequately. It said it would approach relevant ministers and authorities to discuss the issue.

A new law which takes effect on 1 January 2018 means married non-resident employees or pensioners will be placed in "class 1" by the direct tax authority in Luxembourg.

The "class 1" tax band is normally used for single persons and "class 2" for those in officially recognised partnerships

In letters sent out by the Luxembourg direct tax authority, married non-resident taxpayers can either accept a new proposed tax rate, ask for a different rate based on their estimated income next year, or do nothing and, if there is no choice, remain taxable in Luxembourg on both their wage or pension in "class 1".

Married couples have until October 31 to make their choice and inform the authority.

If married cross-border workers wish to be "assimilated" to resident taxpayers and benefit from the same treatment as married employees who live in Luxembourg ("class 2"), they must fulfil one of the following criteria:

• At least 90% of the global revenue of one of the partners is taxable in Luxembourg.
• If less than 90% of the global revenue of one of the partners is taxable in Luxembourg, it can still fall under class 2 if the net revenue of that partner abroad is no more than €13,000.
• For Belgian cross-border workers, at least 50% of the household's professional revenue is taxable in Luxembourg.

(By Hannah Brenton, hannah.brenton@wort.lu, +352 4993 728)