Personal taxation · Luxembourg
Childcare, domestic help and care costs: tax deductions
Childcare, domestic help and dependency-related care costs may, under certain conditions, qualify for a single shared flat-rate allowance. It is limited to the expenses actually borne and must not be added up several times just because several categories of costs exist.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
Check the category and the provider
Childcare must be provided by eligible persons or organisations; approval is a key point, including for a provider in another European Union Member State. The rules on the child and on age must also be examined.
If you employ a helper directly, registration with the social security institutions is part of the checks. An invoice or a bank transfer is not enough to validate an expense if the other conditions are not met.
A shared ceiling
The reference scheme presented by the Luxembourg Inland Revenue (ACD) provides for an annual maximum of EUR 5,400, also limited to the actual costs and to EUR 450 per month. The childcare, domestic help and dependency categories do not each open up a separate ceiling.
The same costs must not be used again in the non-flat-rate calculation of extraordinary expenses. Choosing and allocating the expenses therefore requires an overall reading of the file.
Fictitious example
A household pays for both an eligible crèche and a registered household helper. The total of the invoices must be compared with the shared ceiling and the monthly limits; the calculation is not twice the annual ceiling.
Reimbursements, allowances and amounts that you do not actually bear yourself must be identified before stating a deductible amount.
Documents to prepare
- Invoices, periods, proof of payment and identity of the payee.
- Approval or status of the provider where required.
- Social security documents in the case of direct employment.
- Situation of the child or of the dependent person, and expenses already taken into account elsewhere.
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.