Deducting allowance payments to a divorced spouse or other ongoing allowance payments
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As a taxpayer, you may deduct certain expenses from your taxable income. These expenses include various ongoing allowance payments and charges incurred by you which are tax-deductible under certain conditions. These include:
- payments made to a divorced spouse;
- ongoing allowance payments and charges due by virtue of a specific obligation;
- support or maintenance payments;
- life annuities.
The deduction limit for these charges varies according to the type of allowances you have paid during the year.
Who is concerned
This tax deduction applies to you if you are:
- a resident taxpayer in Luxembourg and you file an income tax return at the latest on 31 December of the year following the tax year under consideration;
- a non-resident taxpayer who opts to be treated as a Luxembourg resident for tax purposes and you file an income tax return at the latest on 31 December of the year following the tax year under consideration;
- a taxpayer residing in Luxembourg—whether an employee or a pensioner— and you request an adjustment of the tax withholdings on wages and salaries by filing an annual adjustment by no later than 31 December of the year following the tax year under consideration;
- a taxpayer who resides in Luxembourg —whether an employee or a pensioner— and you apply to have expenses listed on your tax card in the tax year in question.
Prerequisites
Ongoing allowance payments and charges incurred during the year are tax-deductible if they satisfy the following conditions:
- the allowance payments to a divorced spouse were made following a divorce pronounced by court decision before 1 January 1998;
- the allowance payments to a divorced spouse were made following a divorce pronounced by court decision after 31 December 1997;
- the allowance payments to a divorced spouse were made following a divorce by mutual consent;
- the ongoing allowance payments and charges were due by virtue of a specific obligation, such as allowance payments under a contract, a legal provision or a court decision (no obligation to provide maintenance);
- the life annuity payments were made in consideration of an economic benefit (no obligation to provide maintenance);
- the allowance payments (annuity instalments) were made to persons who, if they found themselves in need, would be entitled, according to the provisions of the Civil Code, to claim support from the taxpayer (obligation to provide maintenance). Such payments must have been stipulated when a property was transferred and must not be excessive in comparison to the value of the transferred property (situation referred to as a donation with charges).
How to proceed
Tax deduction evaluation methods
As taxpayer, you may claim the deduction of ongoing allowance payments made during the year using one of the following methods:
- by filing an income tax return by no later than 31 December of the year following the tax year in question;
- by requesting an adjustment of tax withholdings on wages and salaries by means of an annual adjustment, by no later than 31 December of the year following the tax year in question;
- by having an entry recorded on their tax card in the tax year in question.
Deduction by filing an income tax return
You may deduct the ongoing allowance payments or charges incurred during the year from your taxable income by means of your tax return.
These deductible ongoing allowance payments or charges must be reported in the section entitled 'Special expenses covered by the minimum flat-rate allowance' in Chapter A entitled 'Annuity payments and ongoing charges' of the income tax return (model 100).
Due on account of a specific obligation
In the first cell, you must report the following ongoing allowance payments and charges:
- ongoing allowance payments and charges due by virtue of a specific obligation;
- life annuities;
- maintenance payments.
These allowance payments are deductible from the taxpayer's taxable income, with no limit. However, only 50 % of the annuity payments in consideration of a global benefit are deductible.
Paid to the divorced spouse in the event of a divorce by mutual consent
In this cell, you must report allowance payments made to your former spouse by virtue of a divorce by mutual consent. These allowance payments are deductible from the your taxable income up to a maximum of EUR 24,000 per year and per divorced spouse, regardless of the date of the divorce. Your former spouse who receives these payments is subject to pay tax on them.
Determined by a court decision following a divorce pronounced after 31 December 1997
In this cell, you must report allowance payments made to your former spouse by virtue of a divorce pronounced by court decision after 31 December 1997. These allowance payments are deductible from your taxable income up to a maximum of EUR 24,000 per year and per divorced spouse. Your former spouse who receives these payments is subject to pay tax on them.
Determined by a court decision following a divorce pronounced before 1 January 1998
In this cell, you must report allowance payments made to your former spouse by virtue of a divorce pronounced by court decision before 1 January 1998. They are deductible from your taxable income up to a maximum of EUR 24,000 per year and per divorced spouse if you attach to your tax return a joint written request on plain paper, signed by both of the former spouses. In this case, the allowance payments may be deducted as special expenses. Your former spouse who receives these payments is subject to pay tax on them.
If no joint request is attached to the income tax return, the maintenance payments made to your former spouse may qualify for an allowance for extraordinary expenses (to the extent that the charges exceed a certain percentage of the taxable income). In this case, your former spouse who receives these payments is not liable to pay tax on them.
Deduction by requesting an adjustment of the tax withholdings on wages and salaries by means of the annual adjustment method.
If you are a resident taxpayer —whether an employee or a pensioner— and you do not satisfy the conditions for filing a tax return, you may deduct from your taxable income the allowance payments made to your former spouse by virtue of a divorce by filing a request for an adjustment of the tax withheld on your salary by way of annual adjustment by no later than 31 December of the year following the tax year in question.
If you submit your request for the first time, you must attach a copy of the divorce certificate as well as proof of the payments.
These documents must be returned to the competent RTS Tax Office. The competent office depends on your domicile.
The adjustment request may also be submitted directly online via MyGuichet.lu, using an electronic assistant.
If you are a non-resident taxpayer, you may request that allowances be deducted only if you apply to be treated as a resident for tax purposes and if you file an income tax return (taxation on an assessment basis).
Deduction by way of an entry on the tax card
As a resident taxpayer —whether an employee or a pensioner—, you may have allowance payments to your former spouse further to a divorce recorded on your tax card.
To do so, you mus send:
- your original tax card;
- form 164 R, for residents.
The request to correct/update the tax card should be sent to the tax office for tax withholdings on wages and salaries. The competent office depends on your domicile.
The request must be accompanied by the following documents:
- a copy of the divorce certificate (for first-time requests);
- proof of payments.
Entries recorded on the tax card are only valid for one year and must be renewed each year if the conditions have been met.
If you are a non-resident taxpayer, you may request that allowances be deducted only if you apply to be treated as a resident for tax purposes and if you file an income tax return (taxation on an assessment basis).
Online services and forms
Who to contact
-
Luxembourg Inland Revenue (ACD)
- Address:
- 33, rue de Gasperich L-5826 Hesperange Luxembourg
Please click on the link above to find the competent department.
Related procedures and links
Procedures
Links
Further information
Legal references
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Loi modifiée du 4 décembre 1967
concernant l'impôt sur le revenu
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Circulaire du directeur des contributions directes L.I.R. n°109 bis / 1 du 1er juillet 2002
Traitement fiscal des rentes payées à l'ex-conjoint après le divorce
