1. Remember to make an annual adjustment (“décompte annuel”)

Before discussing the various expenses that you can fill in your tax return to obtain a partial refund, it is worth reminding a point that applies to young workers in particular. Indeed, for your first job, it is likely that you will start your job over the course of the year and not directly at the beginning. However, the amount that will be automatically deducted from your monthly salary will be calculated as if you had earned that salary throughout the whole year. Suppose you start working on September 1st and that your monthly taxable income is €2,500. If you are single, you will be taxed €212.60 per month (2017 scale) or €850.40 for the months of September to December. Your annual taxable income is €10,000, the amount for which no tax is due .

Fortunately, there is a way for you to get a refund for the portion of your taxes that was overpaid. You will need to complete the "Annual adjustment” ("décompte annuel") form available on the website of Luxembourg Inland Revenue ("Administration des contributions directes") and submit it no later than December 31st of the year following that of the adjustment.

Please note that there are two versions of the "Annual adjustment” ("décompte annuel") form, one for residents (163 R) and one for non-residents (163 NR).

How to optimise your taxation as a young worker?

Tax Optimisation