Personal taxation · Luxembourg
Overtime tax credit for cross-border workers (CIHS)
The Luxembourg treatment of overtime and its treatment in your country of residence must be examined separately. The overtime tax credit (CIHS) is a conditional tax credit, not a benefit granted to every cross-border worker who has worked overtime.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
Distinguish salary, exemption and tax credit
The remuneration must correspond to the hours and conditions of the scheme. Hours compensated by time off or credited to a time savings account must be distinguished from the covered hours that are actually paid.
Your country of residence may treat an amount exempt in Luxembourg differently. A local exemption does not become a universal exemption simply because you cross a border.
Eligibility for the CIHS
The Luxembourg Inland Revenue (ACD) sets out cumulative conditions relating in particular to employment income taxable in Luxembourg, the employee's regime, the tax treaty and the domestic law of the country of residence, and social security affiliation.
The tax credit may be claimed through an assessment based on a tax return or through an annual tax adjustment, according to the rules. It is not deducted again if the file has already included it.
Reference calculation, subject to conditions
The official formula provides for no CIHS below EUR 1,200 of relevant gross annual remuneration, a phase-in of 25% of the excess in the following band, and a maximum of EUR 700 above EUR 4,000. The rounding rules and the definition of the amounts must be observed.
This benchmark is not an eligibility assessment. The number of hours shown on an attendance record does not replace the relevant gross remuneration.
File
- Employer statement and certificate detailing the remuneration concerned.
- Conditions and proof of social security affiliation.
- Country of residence and foreign tax treatment.
- Calculation and claims already made for the year.
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.