Personal taxation · Luxembourg
Employee expenses in Luxembourg: flat rate or actual?
Income-related expenses are linked to earning and keeping employment income. A flat-rate allowance is already provided; actual expenses can be examined when they exceed this allowance and are supported by evidence. A personal or reimbursed expense must not be added automatically.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
The flat-rate allowance and actual expenses
The reference flat-rate minimum for an employee's other income-related expenses is EUR 540 per year. Do not add this full flat-rate amount to actual expenses as if they were two independent deductions.
Travel expenses follow a separate regime. Compare amounts in the same category and check the rules applicable to the income and the year.
Establishing the professional link
An invoice may relate to mixed use. You need to document the professional necessity, the share actually borne and, for some equipment, the treatment over time.
Training, a subscription or equipment does not become fully deductible simply because it makes your work easier. Employer reimbursements must be identified before claiming expenses.
Fictitious example
An employee bears EUR 800 of allowable expenses in this category over the year, with no reimbursement. The check is made against the flat-rate allowance that already applies, not by claiming EUR 800 plus EUR 540.
The tax saving is not the difference in expenses in euros: it depends on the tax calculation before and after the additional reduction actually allowed.
File
- Invoices and payments for the year.
- Description of the professional use and the private share.
- Certificates of employer reimbursements.
- Table by category and comparison with the relevant flat-rate allowance.
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.