Personal taxation · Luxembourg
Private pension plan deduction: 2025 and 2026
The deduction for an eligible private pension plan is capped per individual: EUR 3,200 for payments made in the years 2017 to 2025, then EUR 4,500 from 2026. The cap is neither an assured tax saving nor an investment recommendation.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
Choosing the right tax year
| Payments | Reference annual cap | Key point |
|---|---|---|
| 2025 | EUR 3,200 per taxpayer | Tax return for 2025 income filed in 2026 |
| 2026 | EUR 4,500 per taxpayer | Do not apply this amount to 2025 payments |
| Several contracts | One overall cap per person | The number of contracts does not multiply the cap |
The contract must be eligible
Article 111bis sets its own conditions, including the term and the payout arrangements. A product marketed as a "retirement" product is not necessarily eligible. Foreign contracts and older contracts must be checked against their features and framework.
An individual private pension plan is distinct from a supplementary scheme set up by the employer. The two arrangements must not be grouped under the same cap.
Tax saving and contract cost
A reduction in income does not amount to a refund of the payment. The tax effect depends on your file and on the tax before and after the additional net reduction. You also need to consider fees, the lock-in of savings, risks and the taxation of the payout.
Fictitious example: an eligible payment of EUR 3,200 in 2025 does not automatically produce a saving of EUR 3,200, nor necessarily a benefit calculated on the whole of that sum if a flat-rate allowance or deduction is already included in the base being compared.
Useful documents
- The contract and confirmation of its tax regime.
- Annual certificate of payments per person.
- Relevant history where there are several contracts.
- Residence situation and assimilation to resident taxpayers if required.
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.