Personal taxation · Luxembourg
Special expenses in Luxembourg: sorting deductions
Special expenses are deducted from total net income according to their own rules. They are not the same as professional expenses or tax credits. For each expense, you need to identify the category, the year, the limits and what is already taken into account.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
A classification matrix
| Expense | Main check | Useful guide |
|---|---|---|
| Insurance / personal loan | Eligibility and shared ceiling | Insurance and consumer loan interest |
| Private pension plan | Contract and individual ceiling for the year | Article 111bis |
| Home savings plan | Age, contract and use | Separate ceiling |
| Donations | Organisation and limits | Certificate and possible carry-forward |
| Contributions | Compulsory or supplementary scheme | Do not subject them all to the same ceiling |
The flat-rate allowance may already be taken into account
Some expenses are covered by a flat-rate minimum. The additional benefit therefore does not always match the full amount of the certificates you received. Check the basis of comparison before announcing a saving.
An expense must not be used at the same time as a business expense, an income-related expense and a special expense. The classification determines the correct level of the calculation.
Non-residents
Access to special expenses beyond what is allowed without assimilation to resident taxpayers may require Form 100 and the corresponding conditions. Do not transpose a resident's list of deductions to all cross-border workers.
The foreign income relevant to the rate and the household data can change whether the option is worthwhile. Eligibility must be dealt with before calculating the tax effect.
Fictitious example of a check
An insurance certificate, a personal loan and a retirement contract are in the file. The first two may share a limit; the private pension plan contract follows a different regime. Adding them up under a single ceiling or multiplying separate ceilings without checking would give a misleading result.
Sort the certificates by year and by taxpayer. The tax effect calculator must receive an additional net reduction that has already been classified, not all gross expenses.
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
- ACD: special expenses
- ACD: insurance contributions and premiums
- ACD: deductions and Forms 100, 163, 164
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.