Luxembourg

Individual - Foreign tax relief and tax treaties

Last reviewed - 22 August 2024

Foreign tax relief

Foreign income received by residents that is subject to a tax equivalent to Luxembourg income tax and is not exempted by a DTT is granted a tax credit; any non-imputable tax in excess is deductible as a tax-deductible expense.

Tax treaties

Luxembourg has signed 92 DTTs, most of which include provisions of article 26.5 of the Organisation for Economic and Co-operation Development (OECD) model agreement on exchange of information between tax authorities.

Luxembourg is part of the European Union (EU) Regulations 1408/71 and 883/2004 (as amended) governing coordination of social security systems. In addition, Luxembourg has entered into 41 social security bilateral agreements.

Countries with which Luxembourg currently has DTTs:

Andorra Indonesia Rwanda
Argentina Ireland, Republic of San Marino
Armenia Isle of Man Saudi Arabia
Austria Israel Senegal
Azerbaijan Italy Serbia
Bahrain Japan Seychelles
Barbados Jersey Singapore
Belgium Kazakhstan Slovak Republic
Botswana Korea, Republic of Slovenia
Brazil Kosovo South Africa
Brunei Kuwait Spain
Bulgaria Laos Sri Lanka
Cabo Verde Latvia Sweden
Canada Liechtenstein Switzerland
China, People's Republic of Lithuania Taiwan
Croatia Macedonia Tajikistan
Cyprus Malaysia Thailand
Czech Republic Malta Trinidad and Tobago
Denmark Mauritius Tunisia
Estonia Mexico Turkey
Finland Moldova Ukraine
France Monaco United Arab Emirates
Georgia Morocco United Kingdom
Germany Netherlands United States of America
Ghana Norway Uruguay
Greece Panama Uzbekistan
Guernsey Poland Vietnam
Hong Kong Portugal
Hungary Qatar
Iceland Romania
India Russia

New framework agreement on social security position of cross-border teleworkers in the European Union

An EU framework agreement on the determination of the applicable social security scheme for certain cross-borders teleworkers within the European Union was published in June 2023. This framework agreement aims to introduce a more permanent arrangement to determine the social security position of cross-border teleworkers in the European Union as of 1 July 2023. More specifically, the framework agreement provides for a system (on the basis of article 16 of Regulation (EC) no. 883/2004 on the coordination of social security systems) whereby, when adopted by the member states involved, teleworking in an employee’s residence state will, if a number of conditions are met, not be taken into account for the determination of the applicable social security scheme if it accounts for less than 50% of their working time.

The principles of the framework agreement only apply when the member states involved in a given situation have both signed the agreement.