Whether you are a cross-border worker or resident, salaried or self-employed, any paid work you do in Luxembourg makes you a taxpayer. But when does your tax return have to be filed? Many rumours abound so it is a good idea to be aware of the rules for filing tax returns.
First of all, be aware that in some cases you do not have to return a return, regardless of whether you are resident or non-resident. This does not mean that you pay nothing to the state, but that the withholding tax on your income is sufficient, and that you do not believe you have any extraordinary or deductible expenses to declare in order to lighten your tax burden. Is this the case for you? Simply put, since the 2018 tax year, only taxpayers in tax class 1 and 1a (residents and non-residents) who receive only one form of remuneration subject to withholding tax and have a taxable income that is less than €100,000 are exempt from filling out a tax return. Since Article 157(a) has been amended, non-resident tax class 2 taxpayers must file a tax return in Luxembourg to remain in tax class 2, otherwise they will have to switch back to tax class 1.
For all other taxpayers, the question is not so much whether to file a return, but rather when? The basic principle is that a tax return must always be filed for the previous year e.g. this year, you are declaring last year’s earnings, while your current year’s earnings will be declared next year.
In February, you will receive a paper form by post (model 100 F or D depending on the language you choose), or an invitation to download and complete the tax return form online.
For taxpayers who are required to complete a return, this document must be completed, signed and returned by 31 March. Exceptionally, the declaration for the year 2020 can be made until the end of June 2021. In the case of collective taxation, both taxpayers must sign the document. Although official, this date is not routinely applied, except in “pure individual taxation” application for married persons or “with reallocation” for married persons or under partnership. In the case of income tax, you may request an extension of the filing deadline from your nearest Direct Taxation Authority (ACD) branch. To do this, submit the reasons for your request by fax or post.
Do not try to save time for no reason. As guichet.lu notes, “in case of non-compliance with the stated deadlines, a tax surcharge, interest on arrears or a penalty payment may be applied by the tax authorities”. In case of late delivery, be aware that in addition to possible penalties, it will take longer to process your return. Obviously this is not ideal if you want to claim back a portion of the taxes you have paid.
In any case, for latecomers and for taxpayers who are not required to file a tax return, but who wish to do so in order to benefit from tax deductions, the final deadline is 31 December.
NB: If you are a CEO, you have other tax obligations and accordingly a variety of deadlines to keep in mind.