The tax reform that came into effect on 1 January 2017 introduces a number of changes for households to improve access to housing and step up the fight against fraud. It also brings in many improvements for families in response to the increasing diversity of family structures.
Here are some examples:
- Increase in the amount deductible for housekeeping costs (childcare costs, housekeeping, and home assistance) from EUR3,600 to EUR5,400 per year.
- Increase in the amount deductible for extraordinary expenses related to support for children not part of the household from EUR3,480 to EUR4,020.
- Exemption of orphan’s pensions/benefits.
- Doubling of the single-parent tax credit (EUR1,500 per year) for income < EUR35,000 per year. Above EUR35,000, it will progressively decrease, but will remain at EUR750 for income > EUR105,000*.
- Increase in the maximum deductible threshold for premiums paid to retirement savings schemes (as of 2017 tax year, EUR3,200 for all taxpayers).
- Doubling of the maximum deductible amount for contributions to home savings plans (EUR1,344 instead of EUR672) for individuals under 40 years of age.
Please contact your bank for further information, or visit www.reforme-fiscale.public.lu
* From the 2023 tax year, the single-parent tax credit will be €2,505 a year for incomes below €60,000 a year. From €60,000 upwards, it will gradually decrease to a threshold of €750 for incomes over €105,000.