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Non-resident employee or pensioner taxpayers who do not satisfy the conditions for filing an income tax return—not being subject to tax on an assessment basis—may submit a request for an adjustment of the tax withholding on their salary by way of an annual adjustment in order to obtain a refund of any excess taxes withheld at source.
The purpose of the annual adjustment (form 163 NR F) is to determine the tax applicable to the taxpayer's annual taxable income. When the determined tax is less than the total tax withheld by the employer or pension fund, a refund is given by the tax authorities.
This procedure, available by request, cannot in principle result in any additional tax liability for the taxpayer. The request for an annual adjustment is thus only useful to taxpayers who have good reason to expect a refund of at-source withholdings on their salary (withholdings collected by the employer) or pension (withholdings collected by the pension fund).
Any employee or pensioner that has had tax withheld from their salary or pension and who does not satisfy the conditions for filing an income tax return may apply for an adjustment of tax withholdings based on an annual adjustment (form 163 NR F).
Non-resident taxpayers are subject to Luxembourgish income tax only on their domestic income. If they request an adjustment of tax withholdings, in certain cases they must indicate their foreign income.
This is the case for:
Withholding tax relief on wages, salaries or pensions by annual adjustment is generally requested:
Note: applicants for the single-parent tax credit (crédit d'impôt monoparental - CIM) must file a tax return using the 'form 100' form instead of the annual adjustment application form.
The request for an annual adjustment must be filed with the Non-residents RTS tax office (bureau retenue d'impôt sur les traitements et salaires - RTS) by no later than 31 December of the year following the tax year.
In order to request an adjustment of tax withholdings at source, a non-resident taxpayer may submit an annual adjustment form (form 163 NR F). There are only a limited number of deductible expenses that a non-resident taxpayer may claim by way of an annual adjustment.
Non-resident taxpayers may, under certain conditions, claim special expenses, interest paid on a mortgage, extraordinary expenses or the single-parent tax credit by filing a tax return (taxation on an assessment basis) and opting to be treated as a resident for tax purposes.
The form 163 NR F (annual adjustment) form consists of 4 pages:
The adjustment request may also be submitted directly online via MyGuichet.lu, by filling out an interactive questionnaire.
The non-resident taxpayer must attach their Luxembourgish (or foreign) salary statements to the annual adjustment request.
Décompte annuel (personnes physiques non résidentes salariées ou pensionnées non soumises à une imposition par voie d'assiette - 163 NR)
Lohnsteuerjahresausgleich (nichtansässige steuerpflichtige Arbeitnehmer und Rentner die nicht einer Besteuerung durch Veranlagung unterliegen - 163 NR)