Tax deductions in Luxembourg 2026

Every euro you deduct lowers your taxable income. You get back the tax on that euro. At €60,000 gross in class 1, that is about 39 cents per euro.

An example. You earn €60,000 gross and you are single. You pay €4,500 into a private pension, €1,344 into a home savings plan and €672 for insurance. You get €2,235 back a year. That is €186 more each month.

Home contents, comprehensive car and theft insurance do not count. Your employer already deducts your health, care and pension contributions automatically.

1. Fill your private pension up to €4,500. The ceiling rose from €3,200 to €4,500 in 2026. At €80,000 gross, using it in full gives you €1,878 a year. The contract runs for at least ten years and pays out from 60 to 75 at the latest.
2. Pay in by 31 December. What you pay in the calendar year counts. Topping up in December still saves tax for 2026.
3. Use a home savings plan up to 40. Up to €1,344 a year is deductible, more with a partner and children. You need a contract with a building society, in Luxembourg or for example in Germany. A French PEL does not count, because banks offer it.
4. List every insurance. Liability, accident, life, supplementary health and the loan protection insurance of your mortgage count. A family with two children may deduct €2,688.
5. Enter the interest on your home. In the year you move in and the year after, all interest counts. After that, €4,000 per person remain, €16,000 for a couple with two children.
6. Put deductions on your tax card. As a resident, you enter insurance, home savings, private pension and childcare with form 164. The money then comes with your salary every month. As a cross-border worker, you claim them in your tax return and the money comes with your assessment.
7. Save twice as a couple. Each of you may pay €4,500 into your own pension contract, €9,000 together.

This is what €4,500 in a private pension gives back. We assume your insurance already fills the €480 lump sum.

Your employer can also pay you more tax free. Ask about these extras when you negotiate your salary.

1. Collect your documents. Certificates from your insurer, bank and building society, crèche invoices and donation receipts. Most of them arrive by themselves in January.
2. Pick the form. If you live in Luxembourg and do not have to file a return, the annual adjustment with form 163 is enough. As a cross-border worker, you use the tax return form 100 and ask for equal treatment with residents in it.
3. Fill it in online. On MyGuichet.lu a questionnaire takes you through every page. You sign with LuxTrust or a Luxembourg identity card, so cross-border workers use LuxTrust. Paper works too.
4. File by 31 December. For 2025 you have until 31 December 2026. After that, the year is lost.
5. Check the assessment. The tax office sends you its assessment and transfers any tax you paid too much to your account.

A tax return is compulsory, for example, from €100,000 of taxable income or with more than €600 of income without tax withheld. As a cross-border worker in class 2, you always file it. Otherwise you file it voluntarily, because you get money back.

Your salary is taxed in Luxembourg. So the Luxembourg deductions apply to it. You get them when you ask for equal treatment with residents. For that, at least 90 % of your income must be taxed in Luxembourg, or your income outside Luxembourg must stay below €13,000. If you live in Belgium, it is also enough when more than half of your household’s work income comes from Luxembourg.

Without equal treatment, you stay in class 1, also when married. Only the automatic deductions count then. These are the commute, work expenses, the €480 lump sum, your social contributions and maintenance for children outside your household.

Deductible means the amount lowers your taxable income. You get back only your tax rate on it, at 40 % about €1,800 of €4,500. What the table calls back or a tax reduction comes straight off your tax.

For your Luxembourg salary, only the Luxembourg deductions count. Deductions in Germany, France or Belgium lower the tax on income taxed there, such as your partner’s salary.

France has one exception. You get its tax credit for childcare and domestic help paid out even without French tax. Luxembourg then subtracts it from your costs.

For a home loan, Luxembourg is the most generous of the four countries. For a pension, Germany and France allow higher amounts. As a cross-border worker, they only help you against income taxed there.

From 1 January 2028 there is a single tax class. Parliament passed it on 28 October 2026. Couples who were taxed jointly before can keep their scale for another 25 years.

The ceilings rise at the same time. Insurance and loan interest then allow €900 per person. A home savings plan allows €900, or €1,500 aged 18 to 40.

We place professionals from Germany, France and Belgium with companies in Luxembourg. We know the salaries and tell you what you keep at the end.