Individual - Foreign tax relief and tax treaties

Last reviewed - 02 January 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 86 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 Ireland, Republic of Russia
Armenia Isle of Man Rwanda
Austria Israel San Marino
Azerbaijan Italy Saudi Arabia
Bahrain Japan Senegal
Barbados Jersey Serbia
Belgium Kazakhstan Seychelles
Botswana Korea, Republic of Singapore
Brazil Kosovo Slovak Republic
Brunei Kuwait Slovenia
Bulgaria Laos South Africa
Canada Latvia Spain
China, People's Republic of Liechtenstein Sri Lanka
Croatia Lithuania Sweden
Cyprus Macedonia Switzerland
Czech Republic Malaysia Taiwan
Denmark Malta Tajikistan
Estonia Mauritius Thailand
Finland Mexico Trinidad and Tobago
France Moldova Tunisia
Georgia Monaco Turkey
Germany Morocco Ukraine
Greece Netherlands United Arab Emirates
Guernsey Norway United Kingdom
Hong Kong Panama, Republic of United States of America
Hungary Poland Uruguay
Iceland Portugal Uzbekistan
India Qatar Vietnam 
Indonesia Romania

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.