Luxembourg

Individual - Other tax credits and incentives

Last reviewed - 19 July 2022

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 600 depending on the level of income.
  • Single parent tax credit varies between EUR 750 and EUR 1,500 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.

Luxembourg Government has postponed the salary indexation which should have applied in August 2022 to April 2023. In return the Government has introduced a new energy tax credit in order to compensate the lower salary of potential loss of purchasing power.

  • For the gross salary and pension ranged between 936 EUR and 44,000 EUR per year, the credit will amount to 84 EUR per month;
  • For the gross salary and pension ranged between 44,001 EUR and 68,000 EUR per year, the tax credit will amount to 76 EUR per month. Then it will progressively decrease to 0 EUR for salary and pension above 100,000 EUR per year.

The Budget Law for 2019 introduced the CISSM "Crédit d'impôt salaire social minimum" which applied 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, it is calculated as follows: 70/500 x (3,000 - gross monthly salary) EUR per month.