{"id":10488,"date":"2019-11-12T09:00:11","date_gmt":"2019-11-12T08:00:11","guid":{"rendered":"https:\/\/my-life.lu\/?p=10488\/"},"modified":"2019-11-11T17:07:50","modified_gmt":"2019-11-11T16:07:50","slug":"what-is-an-annual-adjustment-form-52010","status":"publish","type":"post","link":"https:\/\/my-life.lu\/en\/what-is-an-annual-adjustment-form-52010\/","title":{"rendered":"What is an annual adjustment form?"},"content":{"rendered":"
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Do you pay taxes in Luxembourg? With its system of withholding tax, the amount withheld from your pay\u00a0cheque may sometimes be too high. In order to remedy this and reclaim any overpaid funds, taxpayers can either file a tax return, or they may choose to submit a voluntary annual adjustment form. myLIFE explains what this form is, and when you might wish to use it.<\/p>\n

In Luxembourg, pensions and employee salaries are subject to withholding tax. This means that income tax is deducted directly from an employee\u2019s salary (by the employer) or a retiree\u2019s pension (by the pension fund) before it is paid. How much depends on the tax class attributed to the taxpayer (1, 1a or 2). Sometimes the amount of tax withheld may be too low, or even too high. This can happen, for example, where a taxpayer is eligible for tax deductions<\/strong><\/span><\/a>. In this case, they can reclaim these funds by filing a tax return (form100<\/strong><\/span><\/a>).<\/p>\n

Taxpayers who are not eligible for taxation by assessment<\/strong><\/span><\/a> or who do not need to file a tax return can still reclaim any withholding tax they overpaid by filing an annual adjustment form (form 163<\/strong><\/span><\/a>).<\/p>\n

By the same token,<\/strong><\/span> however, this process can reveal that you actually have more to pay. That\u2019s why tax adjustment forms are only useful to taxpayers who know they are due to be refunded some of their withholding tax by the government.<\/p>\n

Taxpayers who are not eligible for taxation by assessment or who do not need to file a tax return can still reclaim any withholding tax they overpaid by filing an annual adjustment form (form\u00a0163).<\/p><\/blockquote>\n

When can a taxpayer submit an annual adjustment form?<\/h2>\n

Take Julie, for example<\/strong>. Julie graduated in July of 2018 and then began working in September. Her tax is withheld from her salary directly, and she does not have to file a tax return.<\/p>\n

But for these first few months of work, Julie could reclaim a portion of the income tax she paid. That\u2019s because the tax withheld from employee salaries is calculated based on a full year, and then prorated to the correct number of months. This means it will be too high for 2018, as Julie had only been working for four months, not for the entire year. In 2019, it is in her interest to submit an annual adjustment form for her 2018 income.<\/p>\n

Julie\u2019s case is not the only one that can lead to a refund. There are several scenarios in which taxpayers can request a refund of withholding tax. These include:<\/p>\n