Taxpayers can apply for a tax deduction on their taxable income in the case of extraordinary expenses (charges extraordinaires - CE) which are inevitable and considerably reduce their taxpaying ability.
An expense is deemed extraordinary if it is not incurred by the majority of taxpayers who are in similar circumstances in terms of family situation and the amount of income and assets.
Only the costs that remain to be paid by the taxpayer can be subject to a tax allowance for extraordinary expenses. For example, expenses covered by a health fund or a private mutual insurance cannot be deducted as extraordinary expenses.
Resident taxpayers and non-resident taxpayers treated as resident taxpayers can deduct all extraordinary expenses incurred during the tax year from their taxes.
Expenses that the taxpayer wants to deduct must form part of the extraordinary expenses (CE).
Extraordinary expenses are defined as being inevitable expenses which are likely to significantly reduce the taxpayer's taxpaying ability.
An expense is inevitable when a taxpayer cannot avoid it for material, legal or moral reasons.
The burden must significantly reduce the taxpayer's ability to pay. A taxpayer's ability to pay taxes varies according to their family status and financial situation.
Taxpayers may have to cover expenses without being entitled to a tax relief for extraordinary expenses (CE). This "normal tax burden" corresponds to a certain percentage of taxable income and may vary as follows:
|Since the tax year 2008, the CE have reduced the taxpayer's taxpaying ability based on their tax class and to the extent that the expenses exceed the percentages reproduced below.|
|Tax class||1||2 or 1a|
|Number of children giving rise to a tax deduction||0||0||1||2||3||4||5|
|Taxable income of less than EUR 10,000||2 %||0 %||0 %||0 %||0 %||0 %||0 %|
|Taxable income between EUR 10,000 and EUR 20,000||4 %||2 %||0 %||0 %||0 %||0 %||0 %|
|Taxable income between EUR 20,000 and EUR 30,000||6 %||4 %||2 %||0 %||0 %||0 %||0 %|
|Taxable income between EUR 30,000 and EUR 40,000||7 %||6 %||4 %||2 %||0 %||0 %||0 %|
|Taxable income between EUR 40,000 and EUR 50,000||8 %||7 %||5 %||3 %||1 %||0 %||0 %|
Taxable income between EUR 50,000 and EUR 60,000
|9 %||8 %||6 %||4 %||2 %||0 %||0 %|
|Taxable income over EUR 60,000||10 %||9 %||7 %||5 %||3 %||1 %||0 %|
A taxpayer with a child belonging to their household has a taxable annual income of EUR 72,000.
Childcare expenses: EUR 9,000 per year (EUR 750 per month)
Medical expenses (not reimbursed): EUR 2,500
Total expenditure: EUR 11,500
Calculation of the normal tax burden in tax class 1a or 2: 72,000 X 7 % = EUR 5,040 tax allowance for
extraordinary expenses: 11,500 - 5,040 = EUR 6,460
In the example above, the normal tax burden is EUR 5,040. Only expenses that exceed the normal tax burden are considered extraordinary expenses and are deductible, i.e. EUR 6,460 in this example.
Child care expenses include the costs for the placement of a child in a duly accredited day and night care establishment or a daycare establishment. These also include expenses for duly accredited crèches, daycare facilities or collective care facilities, drop-in centres and childminders.
A tax deduction is also granted for childcare expenses incurred in another Member State of the European Union, provided that the person or body is recognised by the competent authorities of the Member State.
Expenses for domestic services include amounts incurred for household helpers, housekeepers and other domestic staff. Expenses related to household personnel are not deductible unless:
Expenses incurred for the employment of gardeners, drivers or concierge staff are not tax deductible.
These are expenses for assistance and care services due to the state of dependency of the taxpayer, their spouse or partner, or a child who does not qualify for a tax allowance for children who do not form part of the taxpayer's household.
Costs related to the maintenance, education or vocational training of children cannot give rise to a deduction of extraordinary expenses (CE).
These expenses are systematically taken into consideration either by the tax reduction for children if the child forms part of the taxpayer's household, or by the tax allowance for children who do do not form part of the taxpayer's household.
These expenses include expenses incurred for the maintenance, education and training of close family members, which are deductible if no other person can be made responsible for these expenses or if there is a legal maintenance obligation.
The Civil Code provides for the obligation to provide support to certain relatives by blood or marriage, if the latter are in need. A reciprocal obligation of support exists between descendants and forebears, between sons- and daughters-in-law on the one hand, and stepfathers and stepmothers on the other hand, between adopted children and adoptive parents, and between spouses (even if legally separated).
Expenses will be reduced by the available resources of the person being cared for.
Child maintenance payments to a separated or divorced spouse by virtue of a court order issued before 1 January 1998 are deductible as extraordinary expenses if the divorced spouses have not filed a joint application for the deduction of child maintenance payments as special expenses and insofar as they exceed the taxpayer's normal tax burden.
Child maintenance payments determined by a court order after 31 December 1997 are deductible as special expenses.
Other types of expenses may be deducted as extraordinary expenses, including:
In order to deduct most extraordinary expenses, non-resident taxpayers must submit a tax return, provided they meet the conditions to be treated as a resident for tax purposes.
Only the costs for the maintenance and education of children who do not form part of their household (including maintenance payments) can be deducted by an annual adjustment or by a listing of the expenses on their tax card.
Extraordinary expenses can be deducted based on the principle of actual costs (costs actually incurred).
The deduction of extraordinary expenses by a flat-rate allowance is only possible for 3 types of expenses:
Taxpayers can deduct a maximum flat-rate tax allowance of EUR 450 per month or EUR 5,400 per year.
The flat-rate tax allowance may not exceed the costs actually incurred.
In the case of combined expenses for domestic services, assistance/care services and childcare services, the tax allowance is granted only once.
These expenses can be deducted with flat-rate tax allowance based on the rate of reduction in the taxpayer's working capacity.
The flat-rate tax allowance may not exceed the costs actually incurred.
To deduct extraordinary expenses:
The non-resident may also claim the expenses for the maintenance and education of children who do not form part of their household (including maintenance payments) by annual adjustment (page 2 of form 163 NR) or by listing the expenses on their tax card (page 2 of form 164 NR).
Taxpayers can attach the total amount of expenses not reimbursed, briefly described and dated, to any application. As the allowance for extraordinary expenses (CE) can be calculated in 2 ways, as a flat-rate allowance or by deducting the normal tax burden, the taxpayer is entitled to the most favorable amount.
Taxpayers can claim the actual costs on the basis of a copy of the supporting documents. They can also provide a copy of a medical certificate detailing the precise circumstances.
Décompte annuel de l'année 2019 (personnes physiques résidentes salariées ou pensionnées non soumises à une imposition par voie d'assiette - 163 R)
Lohnsteuerjahresausgleich für das Jahr 2019 (ansässige steuerpflichtige Arbeitnehmer und Rentner die nicht einer Besteuerung durch Veranlagung unterliegen - 163 R)
Décompte annuel de l'année 2019 (personnes physiques non résidentes salariées ou pensionnées non soumises à une imposition par voie d'assiette - 163 NR)
Lohnsteuerjahresausgleich für das Jahr 2019 (nichtansässige steuerpflichtige Arbeitnehmer und Rentner die nicht einer Besteuerung durch Veranlagung unterliegen - 163 NR)
Demande en établissement, rectification, inscription d'une modération ou établissement d'un duplicata d'une fiche de retenue pour contribuables résidents (Modèle 164 R F)
Demande en établissement, inscription d'une modération ou rectification d'une fiche de retenue d'impôt pour salariés et pensionnés habitant au Grand-Duché de Luxembourg-FR (formulaire 164 R/EM)
Antrag auf Ausstellung, Berichtigung, Eintragung einer Ermäßigung oder Ausstellung eines Duplikates einer Steuerkarte für ansässige Steuerpflichtige (Vordruck 164 R D)
Antrag auf Ausstellung, Eintragung einer Ermäßigung oder Berichtigung einer Lohnsteuerkarte für Lohn- und Pensionsempfänger die im Großherzogtum Luxemburg wohnen-DE (formulaire 164 R/EM)
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)
Demande en établissement, inscription d'une modération ou rectification d'une fiche de retenue d'impôt pour contribuables non résidents-FR (formulaire 164 NR/EM)
Antrag auf Ausstellung, Berichtigung, Eintragung einer Ermäßigung oder Ausstellung eines Duplikates einer Steuerkarte für nicht ansässige Steuerpflichtige (Vordruck 164 NR D)
Antrag auf Ausstellung, Eintragung einer Ermäßigung oder Berichtigung einer Lohnsteuerkarte für nicht ansässige Steuerpflichtige (Vordruck 164 NR/EM)