Personal taxation · Luxembourg
Business or professional income: net profit in Luxembourg
The net income from a self-employed activity results from a tax and accounting method applicable to that activity. Receipts, expenses and fixed assets must be classified before preparing the schedules and Form 100. Turnover is not profit.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
Determining the category
Commercial profit and profit from a liberal profession each have their own criteria. The profession stated on a website or an invoice does not settle every mixed situation.
An activity carried on through a company must be distinguished from the personal activity of its manager. The company's receipts do not automatically become the shareholder's personal professional income.
Building a verifiable result
- Reconcile receipts with invoices, statements and any amounts receivable.
- Classify business expenses and separate out the private share.
- Identify fixed assets and their treatment.
- Check allocation to the financial year according to the applicable method.
- Prepare the schedules and the reconciliation with contributions and tax advance payments.
Fictitious example
A professional buys equipment that can be used for several years. Paying for it is not enough to justify that its full cost reduces the result immediately. The nature of the asset, its base and any depreciation must be examined.
Likewise, a transfer to the professional's private account is not necessarily an operating expense. Cash flows and expenses in the result serve different purposes.
From profit to Form 100
The professional result is included in the personal file together with the other income, deductions and applicable options. Tax advance payments already made are taken into account in the tax statement, not as an expense that freely reduces profit.
The quote must specify whether the accounts are already available and validated or whether a reconstruction is needed. A final form does not correct an unreliable accounting base.
The firm’s other tax engagements
Depending on your situation, the firm also handles tax, VAT and payroll, the regularisation of late tax filings and assistance during a tax audit. Fees are listed in the firm’s fee grid.
Official sources and scope
The rules apply to the year and profile concerned. Examples flagged as fictitious explain a method; they are not an individual validation. The documents and options of your file are covered by a separate engagement.