Luxembourg

The following three tax credits are available:

• Employee tax credit varies between EUR 0 and EUR 696 depending on the level of income.
• Pensioner tax credit varies between EUR 0 and EUR 696 depending on the level of income.
• Single parent tax credit varies between EUR 750 and EUR 2,505 depending on the level of income.

Each of these credits may give rise to a tax refund even where the final taxes are lower than the credit itself.

The Budget Law for 2019 introduced the CISSM (Crédit d'impôt salaire social minimum), which applies to employees and apprentices when their salary is between EUR 1,500 and EUR 3,000. The amount of the CISSM varies according to the gross salary. Between EUR 1,500 and EUR 2,500, the amount of the CISSM is EUR 70.00. Between EUR 2,500 and EUR 3,000, the amount of the CISSM is degressive and is calculated as follows: 70/500 x (3,000 - gross monthly salary) EUR per month.

As per the 2023 Budget Law, the earnings ceiling for the maximum tax credit is increased from EUR 35,000 to EUR 60,000.

The tax credit for minimum wage earners of EUR 70 per month currently only applies to employees earning a monthly gross wage of between EUR 1,500 and EUR 2,500. Since the minimum wage increased in 2023, the qualifying income range is also increased from EUR 1,800 to EUR 3,000.