Tax implications in the event of marriage

This page was last modified on 19-01-2018

Married taxpayers have, under certain conditions, the choice between:

  • joint taxation;
  • purely individual taxation;
  • individual taxation with reallocation of income between spouses.

Taxpayers who live together without being married are separately taxable. Partners (in a civil partnership) also have, under certain conditions, the option of being taxed jointly.

Forms / Online services

Carry out your procedure:

  • With an online service

    • Pour les contribuables mariés : demande de simulation ou d'individualisation / taux RTS
    • Décompte annuel 2017 - Modèle 163
  • By downloading a form

    • Pour les contribuables mariés : demande d'individualisation et/ou d'assimilation
    • Décompte annuel de l'année 2017 (personnes physiques résidentes salariées ou pensionnées non soumises à une imposition par voie d'assiette - 163 R)
    • Décompte annuel de l'année 2017 (personnes physiques non résidentes salariées ou pensionnées non soumises à une imposition par voie d'assiette - 163 NR)
    • Demande en établissement, rectification, inscription d'une modération ou établissement d'un duplicata d'une fiche de retenue pour contribuables non résidents (modèle 164 NR F)

* May be submitted via MyGuichet

Who is concerned

Each married taxpayer or who is getting married during the year, whether resident or non-resident.

How to proceed

Implications of marriage for resident taxpayers

Resident taxpayers who are already married at the beginning of the year or who marry during the year are in principle taxed in tax class 2.

In tax class 2, tax is calculated using the "splitting" method:

  1. the income of both spouses is aggregated;
  2. this aggregate income is 'split' in 2 halves;
  3. the base rate in class 1 is applied to each half;
  4. the tax thus determined is doubled.

Taxpayers who are taxed jointly are jointly and severally liable for the payment of tax.

However, as of the 2018 fiscal year, they may choose to be taxed individually (pure individual taxation or reallocation), according to tax class 1.

Implications with respect to tax cards (employees or pensioners)

Taxpayers who are already married at the beginning of the year

Taxpayers who are either salaried employees or pensioners and who are married at the beginning of the tax year receive a tax card for each employment or each Luxembourgish pension, in accordance with the terms of tax class 2 if they are taxed jointly.

However, as of the 2018 fiscal year, they may choose to be taxed separately (pure individual taxation or reallocation), according to tax class 1. Their tax card(s) are/will be automatically updated each time.

The 2018 taxation method can be chosen or renewed online via MyGuichet until 31 March 2019. Past that date, their last choice made becomes irrevocable.

Taxpayers who marry during the year

Taxpayers who are employees or pensioners in Luxembourg and who marry during the year receive a separate tax card for each employment or pension received which reflects their situation on 1 January. Following the marriage, the cards will be automatically updated.

However, as of the 2018 fiscal year, they may choose to be taxed separately (pure individual taxation or reallocation), according to tax class 1. Their tax card(s) are/will be automatically updated each time.

The 2018 taxation method can be chosen or renewed online via MyGuichet until 31 March 2019. Past that date, their last choice made becomes irrevocable.

Practical information regarding the withholding tax

As soon as the employer or the pension fund receives the card, the new situation may be taken into consideration when calculating the withholding tax. The change of tax class or rate on the tax card is taken into consideration from the new validity date on the card.

In the case of joint taxation, only one of the spouses is taxed in tax class 2. The tax withholding for the other spouse is calculated by applying the fixed rate of 15 %. This may result in the spouses having to pay a significant amount in additional tax upon receipt of their tax assessment. To avoid having to pay this additional tax once a year, the ACD recommends to declare any changes in revenues received and, if applicable, to allow for quarterly advance payments to be set.

In the case of individual taxation:

  • either tax class 1 is applied to each spouse;
  • or they are taxed at the rate shown on their tax card.

Adjustments to withholding tax

Married taxpayers may adjust their withholding tax by filing an income tax return or, in the absence of a filing requirement, an annual adjustment.

In doing so, their income will be taxed based on tax class 2 criteria for the entire year, effective retroactively as of 1st January.

Implications of marriage for non-resident taxpayers

Resident taxpayers who are already married at the beginning of the year or who marry during the year are in principle taxed in tax class 1 as of the 2018 tax year.

However, they have the option of applying to be taxed jointly in tax class 2, provided they have opted to be treated as a resident taxpayer.

In tax class 2, tax is calculated using the "splitting" method:

  1. the spouses' income is aggregated;
  2. this aggregate income is 'split' in 2 halves;
  3. the base rate is applied to each half;
  4. the tax thus determined is doubled.

Taxpayers who are taxed jointly are jointly and severally liable for the payment of tax.

Implications with respect to tax cards (employees or pensioners)

Taxpayers who are already married at the beginning of the year

Non-resident employees or pensioners receive a tax card for each employment or Luxembourg pension, according to the terms of tax class 1, and are taxed separately.

To request the modification of a tax card, taxpayers can send the duly completed Form 164 NR to the Luxembourg Non-residents RTS Tax Office, along with a copy of the marriage certificate.

As of the fiscal year 2018 and provided they meet the conditions to be treated as resident taxpayers, they can choose to be taxed:

  • jointly with the rate in tax class 2; or
  • purely individually according to the tax rate in class 1; or
  • individually with reallocation according to the tax rate in tax class 1.

They will then be entitled to the same legal provisions, deductions, allowances and credits as resident taxpayers.

The 2018 taxation method can be chosen or renewed online via MyGuichet until 31 March 2019. Past that date, their last choice made becomes irrevocable.

Their tax card(s) are/will be automatically updated each time.

Taxpayers who marry during the year

Employed taxpayers or pensioners in Luxembourg who marry during the year must inform the ACD of their change of marital status by sending the duly completed 164 NR form to the Non-Residents RTS Tax Office, along with a copy of the marriage certificate.

Since 1 January 2018, taxpayers who are not resident employees or pensioners obtain a tax card for each employment or pension, according to the terms of tax class 1, and are taxed separately.

As of the fiscal year 2018 and provided they meet the conditions to be treated as resident taxpayers, they can choose to be taxed:

  • jointly with the rate in tax class 2; or
  • purely individually according to the tax rate in class 1; or
  • individually with reallocation according to the tax rate in tax class 1.

They will then be entitled to the same legal provisions, deductions, allowances and credits as resident taxpayers.

The 2018 taxation method can be chosen or renewed online via MyGuichet until 31 March 2019. Past that date, their last choice made becomes irrevocable.

Their tax card(s) are/will be automatically updated each time.

Practical information regarding the withholding tax

As soon as the employer or the pension fund receives the card, the new situation may be taken into consideration when calculating the withholding tax. The change of tax class or rate on the tax card is taken into consideration from the new validity date on the card.

In the case of joint taxation of a married non-resident, the rate in tax class 2 applies to each of the employed or retired spouses. The deduction calculated by applying this estimated tax rate may result in an additional tax or a tax refund payable upon receipt of the tax statement. To avoid having to pay an additional tax, the ACD recommends to declare any changes in revenues received and, if applicable, to allow for quarterly advance payments to be set.

In the case of individual taxation, the spouses are taxed at the rate shown on their tax card, which is calculated according to class 1.

Adjustments to withholding tax

Married taxpayers may adjust their withholding tax by filing an income tax return or, in the absence of a filing requirement, an annual adjustment.

In doing so, their income will be taxed based on tax class 2 criteria for the entire year, effective retroactively as of 1 January.

Implications of marriage for a married couple of whom one is a resident taxpayer and the other a non-resident

Spouses of whom one is a resident taxpayer and the other a non-resident but who do not actually live separate and apart, are taxed jointly on joint request provided that the resident spouse earns at least 90 % (threshold) of the professional income of the household in Luxembourg during the tax year.

In tax class 2, tax is calculated using the "splitting" method:

  1. the income of both spouses is aggregated;
  2. this aggregate income is 'split' in 2 halves;
  3. the base rate in class 1 is applied to each half;
  4. the tax thus determined is doubled.

Taxpayers who are taxed jointly are jointly and severally liable for the payment of tax.

As of the 2018 fiscal year, however, they may choose to be taxed separately (pure individual taxation or reallocation), according to tax class 1.

Implications with respect to tax cards (employees or pensioners)

Taxpayers who are already married at the beginning of the year or who marry during the year

Employed taxpayers or pensioners, of whom one is a resident taxpayer and the other a non-resident, receive a tax card for each employment or Luxembourg pension, according to the terms of tax class 1, and are taxed separately.

Upon joint request, spouses who do not actually live separate and apart are taxed jointly according to the terms of tax class 2, provided that the resident spouse earns at least 90 % of the household's professional income in Luxembourg during the tax year.

To request the modification of a tax card, taxpayers can send the completed Form 164 NR to the competent RTS Tax Office, along with a copy of the marriage certificate.

As of the fiscal year 2018, they can also choose to be taxed:

  • purely individually according to the tax rate in class 1; or
  • individually with reallocation according to the tax rate in class 1.

The choice of the 2018 tax method can be made or renewed online via MyGuichet until 31 March 2019. Past that date, their last choice made becomes irrevocable.

Their tax card(s) are/will be automatically updated each time.

Practical information regarding the withholding tax

As soon as the employer or the pension fund receives the card, the new situation may be taken into consideration when calculating the withholding tax. The change of tax class or rate on the tax card is taken into consideration from the new validity date on the card.

Adjustments to withholding tax

Married taxpayers may adjust their withholding tax by filing an income tax return or, in the absence of a filing requirement, an annual adjustment.

In doing so, their income will be taxed based on tax class 2 criteria for the entire year, effective retroactively as of 1 January.

Extra-professional tax allowance

Married taxpayers who are taxed jointly benefit from an extra-professional allowance of EUR 4,500 per year. Where the tax liability does not cover the whole year, the allowance is reduced to EUR 375 per full month of tax liability.

Married taxpayers opting for pure individual taxation with or without reallocation of income can also obtain an extra-professional allowance of EUR 2,250 for the whole year, and EUR 187.50 per whole month if the activity has not been exercised throughout the year.

Non-residents can only claim this allowance if they have opted to be treated as a Luxembourg resident for tax purposes.

The extra-professional allowance applies to spouses: