A withholding tax card or "tax card" contains information about:
- the tax class of the employee or pensioner (for the main card); or
- the tax rate (for the additional card).
This document is necessary for the employer or the pension fund to establish the withholding tax on salaries or pensions.
The tax card is issued at the beginning of the year by the competent tax office (Non-residents RTS office) of the Luxembourg Inland Revenue (Administration des contributions directes – ACD) to non-resident employees or pensioners.
Who is concerned
All non-resident employees working in Luxembourg and all pensioners subject to tax in Luxembourg must have a tax card.
Income from a paid occupation and pensions paid by Luxembourg statutory pension funds are subject to withholding tax (tax deducted at source).
Taxes deducted at source by employers or pension funds are based on the tax scale appearing on the main tax card and, if applicable, the tax rate appearing on the additional tax cards.
Taxes withheld on salaries or pensions is determined by taking into account the tax reductions (deductions, abatements and tax credits) indicated on the withholding tax card ("tax card").
How to proceed
Issuing of tax cards
The withholding tax cards are issued automatically by the ACD once a year and in the event of a change in personal circumstances.
Tax cards are sent directly to recipients by post. They cannot be picked up directly at the Non-residents RTS office.
Taxpayers who received their tax card in year N but did not receive their N + 1 tax card before 1 March of year N + 1 must contact the comptetent RTS office and inform their employer that the application is in progress.
Changes in personal or professional circumstances
The tax form is updated automatically by the Luxembourg Inland Revenue (ACD) within an average of 30 working days if any of the following events occur:
- a change of employer;
- a change in the employer's company name or address;
- the employee is deregistered from the Joint Social Security Centre (CCSS) by the employer;
- retirement, in accordance with the social security laws;
- a change in the composition of a taxpayer's household as reported to the Children's Future Fund (Caisse pour l'avenir des enfants – CAE).
Tax cards are not affected by civil partnerships.
Updates in the non-resident taxpayer's address or marital status (marriage, divorce, separation, death) must be notified by the salaried worker or pensioner using the form 164 NR, which then has to be submitted to the Non-residents RTS office.
A taxpayer who gets married or has a child during the year sees his or her tax class change:
- in the event of marriage: if the spouses are taxed jointly, they will be listed in tax class 2;
- in the event of the birth of a child: if a taxpayer benefits from a tax reduction (in any form whatsoever) for the child, he will be listed in tax class 1a, unless he is already listed in class 2.
These tax class changes on the tax card take effect from the date of marriage or the birth of the child. Tax withheld between the date of birth and the delivery of the new updated tax card may be rectified after the new tax card is submitted to the employer or the pension fund.
Special case: salaried employees who have accommodation in Luxembourg and abroad
This applies, for example, to employees living in Belgium who have accommodation (pied-à-terre) in Luxembourg during the week and return to their family in Belgium on weekends and holidays.
Regardless of their address, natural persons are theoretically considered non-resident taxpayers in Luxembourg as long as they possess a centre of vital interests abroad, outside Luxembourg.
Taxpayers receive a tax card as a resident employee (address in Luxembourg). If their vital interests are abroad, they have to apply for a tax card for non-residents to the RTS tax office - Non-residents.
Checking and submission of tax cards
The taxpayer must check the information printed on the card upon receipt.
Employees must submit their original card to their employer (or the competent body) before unemployment or re-employment benefits can be granted.
In principle, pensioners only receive a copy for information purposes, while the original is sent directly to the pension fund. The tax card is established based on data from the last card issued when the taxpayer was employed.
If any of the information on the card is incorrect, the changes must be requested from the Luxembourg Inland Revenue (Non-residents RTS Office) using form 164 R and attaching the required supporting documents.
The Luxembourg Inland Revenue reserves the right to request supporting documents as part of the process of verifying any information, statements, applications, declarations, claims or appeals submitted to its offices.
The different types of tax cards
The taxpayer who receives several salaries or pensions at the same time receives multiple tax cards.
The same applies to married taxpayers who each receive a salary or a pension which is taxable in Luxembourg, and who are subject to joint taxation.
Workers who have several employers must submit a tax card to each employer.
The withholding tax from the main salary (the most stable and highest salary) is calculated and applied based on the main withholding tax card (1st tax card) by application of the tax scale for salaries or pensions.
For the other salaries, the withholding is made on the basis of an additional tax card (second, third, etc., tax card), with the application of a fixed tax withholding rate of:
- 33 % for tax class 1;
- 21 % for tax class 1a;
- 15 % for tax class 2.
If the main tax card does not apply to the most stable and highest income, taxpayers can file a request with the relevant RTS office, using form 164 NR, to have the main card changed to an additional card.
Taxpayers must provide the necessary supporting documents (copies of both spouses' salary slips for the last 3 months) attesting to their income.
The taxpayers must specify that they wish to have the main card changed to an additional card by including the annotation, 'Prière de reconsidérer la fiche principale' (Please review the main card). This change has no influence on the tax due at the end of the year, but only on the amount of tax deducted at source.
Taxpayers applying for a reduced rate must attach copies of their payslips for the last 3 months with the annotation 'Prière de reconsidérer mon taux au plus bas' (please review my lowest rate).
Registration of tax deductions on the tax card
Employees/pensioners may file a request (using form 164 NR) to have certain tax reductions listed on their tax card (deductions, abatements, tax credit) so that they can be taken into account by their employer or relevant pension fund when calculating net income.
For instance, non-resident taxpayers may file a request to have any of the following listed on their tax card:
- additional business expenses (frais d'obtention - FO);
- extraordinary expenses for children who do not form part of the taxpayer's household;
- flat-rate travel expenses (FD);
- the deduction of the increased allowance for business expenses of disabled/impaired employees (a copy of the medical certificate specifying the degree of reduction of the employee's work capacity should be attached);
- the tax allowance for sustainable forms of transport.
Other extraordinary expenses (illness, relatives in need, disability, household staff expenses, childcare expenses, etc.) may be taken into account but only if the non-resident opts to be treated as a resident for tax purposes and files a tax return.
The tax deductions listed on a tax card are valid only for the year for which they were requested.. Applications must be renewed every year to ensure that the required conditions are met.
The advantage of listings on the tax card is that they allow tax reductions (deductions, abatements, tax credit) to be taken into account when calculating the net salary without having to wait for the income tax assessment notice resulting from the tax return.
The amount of tax deducted at source during a fiscal year may occasionally be too high or too low. The difference can be refunded or recovered retroactively during the year following the fiscal year, either through taxation by assessment (model 100 - tax return) or by annual adjustment (form 163).
Interest expenses relating to the purchase of a residential property may not be listed on the tax card, and can only be taken into account upon the filing of an income tax return (form 100).
Supporting documents to be submitted
The supporting documents to be attached to the application for registration of a tax deduction must be accompanied by the documents listed on the last page of form 164.
The Luxembourg Inland Revenue reserves the right to request additional supporting documents as part of the process of verifying any information, statements, applications, declarations, claims or appeals submitted to its offices.
Tax cards are not affected by civil partnerships.
Requesting a duplicate tax card
Non-resident employees/pensioners who have lost their tax card must file a request for a duplicate with the Non-residents RTS tax office, preferably using the form provided for that purpose.
Please note: the withholding tax card is not to be confused with:
- the salary certificate;
- the pension certificate;
- the income certificate.
No tax card
If no tax card is submitted to the employer or pension fund, the tax deducted at source on the salary or pension is determined on the basis of tax class 1, and the tax can not be lower than 33 %.
Forms / Online services
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)
Antrag auf Ausstellung, Berichtigung, Eintragung einer Ermäßigung oder Ausstellung eines Duplikates einer Steuerkarte für nicht ansässige Steuerpflichtige (Vordruck 164 NR D)