Social security contributions (where applicable) in relation to the directors' fees or attendance fees are deductible as special expenses and should be reported on page 14 of the income tax return form in Box 1433 (non-exempt income) or Box 1434 (exempt income).

Resident taxpayer scenario

In terms of taxation, directors' fees or attendance fees, as well as special indemnities and benefits allocated in addition to or instead of directors' fees, from a Luxembourgish source, are subject to withholding at source at a rate of 20 % of the gross amount (or 25 % of the net amount), collected by the payer.

Directors' fees or attendance fees from a Luxembourgish source that are collected by a resident taxpayer should be reported on the income tax return form (form 100) and are taxable at the ordinary progressive rates. The maximum marginal tax rate (including the solidarity tax) amounts to either 42.80 %, or 43.60 %. The 20 % withholding at source is creditable against the income tax liability.

When filing their income tax return as a resident, the taxpayer must declare the income from directors' fees and attendance fees that they have collected during the year from Luxembourgish and foreign sources on page 6 of the income tax return form (form 100 – Section "Earnings from self-employment").

The first 2 columns on page 6 of the income tax return form are for non-exempt income and the next 2 columns are for exempt income.

Non-exempt income

Directors' fees or attendance fees paid by the Government or one of its communes, a Luxembourgish public institution or a company that has its registered office or principal place of business in the Grand-Duchy, are taxable in Luxembourg and must be reported as follows:

Directors' fees

• Boxes 630 / 631 (Row D): the total gross directors' fees collected in the year (amount collected, plus withholding at source). The taxpayer attaches a statement indicating the gross amount collected, the tax withheld at source and the payer of the fees.
• Boxes 634 / 635 (Row D): the expenses incurred by the taxpayer in relation to the directors' fees. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).
• Box 650: the taxpayer must report the 20 % (or 25 %) withholding at source levied by the payers.

Attendance fees

• Boxes 638 / 639: the total gross attendance fees collected in the year (amount collected, plus withholding at source). The taxpayer attaches a statement indicating the gross amount collected, the tax withheld at source and the payer of the attendance fees.
• Boxes 642 / 643: the expenses incurred by the taxpayer in relation to the attendance fees. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).

Instead of the flat-rate allowance for operating expenses, the delegates of Professional Federations and Chambers, the National Health Fund (Caisse nationale de santé), the Health Insurance Funds (Caisses de maladie), Social Insurance entities, the Economic and Social Council (Conseil économique et social), as well as members of communal councils or communal committees, and national administrative committees who receive attendance fees may opt for an allowance for out-of-pocket-expenses of EUR 15 per session, which may not exceed EUR 45 per month or EUR 540 per year. When actual expenses exceed the flat-rate allowance, the taxpayer may request that actual expenses be taken into consideration on the basis of supporting documents.

Exempt income

In theory, directors' fees or attendance fees from foreign sources are not taxable in Luxembourg, and are consequently reported on page 6 of the income tax return in the exempt income column.

Directors' fees

• Boxes 632 / 633 (Row D): the total gross directors' fees collected in the year from a foreign source. The taxpayer attaches a statement indicating the gross amount collected and the payer of the directors' fees.
• Boxes 636 / 637 (Row D): the expenses incurred by the taxpayer in relation to the directors' fees from a foreign source. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).

Attendance fees

• Boxes 640 / 641: the total gross attendance fees collected in the year from a foreign source. The taxpayer attaches a statement indicating the gross amount collected and the payer of the attendance fees.
• Boxes 644 / 645: the expenses incurred by the taxpayer in relation to the attendance fees from a foreign source. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).

Non-resident taxpayer scenario

In terms of taxation, directors' fees or attendance fees, as well as special indemnities and benefits allocated in addition to or instead of directors' fees, from a Luxembourgish source, are subject to withholding at source at a rate of 20 % of the gross amount (or 25 % of the net amount), collected by the payer.

Non-resident taxpayer must file an income tax return and report any directors' fees and/or attendance fees on it if:

• the gross amount of the directors' fees or attendance fees collected from a Luxembourgish source (non-exempt income) is more than EUR 100,000 euros per year;
• the gross amount of the directors' fees or attendance fees collected from a Luxembourgish source (non-exempt income) is less than or equal to EUR 100,000 per year and exceeds one of the other tax basis limits.

Non-resident taxpayer may file an income tax return and report any directors' fees and/or attendance fees on it if:

• the gross amount of the directors' fees or attendance fees collected from a Luxembourgish source (non-exempt income) is less than or equal to EUR 100,000 per year;
• they collect directors' fees and/or attendance fees from a Luxembourgish source (non-exempt income) or a foreign source (exempt income) and opt to be treated as a resident for tax purposes.

Directors' fees and attendance fees from a Luxembourgish source are taxable at the ordinary progressive rates. The maximum marginal tax rate (including the solidarity tax) amounts to either 42.80 %, or 43.60 %.

The 20 % withholding at source in Luxembourg is creditable against the income tax liability. The tax withheld at source is a final tax if the non-resident taxpayer has not received any other professional income—business profit, agricultural and forestry profit , earnings from self-employment, income from pensions or annuities, or income from paid employment—that is taxable in Luxembourg, and the gross amount of the directors' fees received does not exceed EUR 100,000 per year. As such, non-resident taxpayers who satisfy both of the conditions mentioned above are not required to file an income tax return in Luxembourg.

Nevertheless, the taxpayer may still file a tax return if they wish, for example, to claim operating expenses (out-of-pocket and travel expenses) and/or have their family situation taken into account. If they do file a tax return, only the income from the directors' fees or attendance fees from Luxembourgish sources must be reported on the return form.

When filing their income tax return as a non-resident, the taxpayer must report any directors' fees and attendance fees that they collected during the year from Luxembourgish or foreign sources on page 6 of form 100 of the income tax return.

The first 2 columns on page 6 of the income tax return form are for non-exempt income and the next 2 columns are for exempt income.

Non-exempt income

Directors' fees or attendance fees paid by the Government or one of its communes, a Luxembourgish public-law institution or a company that has its registered office or principal place of business in the Grand-Duchy, are taxable in Luxembourg and must be reported as follows:

Directors' fees

• Boxes 630 / 631 (Row D): the total gross directors' fees collected in the year (amount collected, plus withholding at source). The taxpayer attaches a statement indicating the gross amount collected, the tax withheld at source and the payer of the fees.
• Boxes 634 / 635 (Row D): the expenses incurred by the taxpayer in relation to the directors' fees. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).
• Box 650: the taxpayer must report the 20 % (or 25 %) withholding at source levied by the payers

Attendance fees

• Boxes 638 / 639: the total gross attendance fees collected in the year (amount collected, plus withholding at source). The taxpayer attaches a statement indicating the gross amount collected, the tax withheld at source and the payer of the attendance fees.
• Boxes 642 / 643: the expenses incurred by the taxpayer in relation to the attendance fees. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).

Instead of the flat-rate allowance for operating expenses, the delegates of Professional Federations and Chambers, the National Health Fund (Caisse nationale de santé), the Health Insurance Funds (Caisses de maladie), Social Insurance entities, the Economic and Social Council (Conseil économique et social), as well as members of communal councils or communal committees, and national administrative committees who receive attendance fees may opt for an allowance for out-of-pocket-expenses of EUR 15 per session, which may not exceed EUR 45 per month or EUR 540 per year. When actual expenses exceed the flat-rate allowance, the taxpayer may request that actual expenses be taken into consideration on the basis of supporting documents.

Exempt income

In theory, directors' fees or attendance fees from foreign sources are not taxable in Luxembourg, and are consequently reported on page 6 of the income tax return in the exempt income column, but only if the taxpayer opts to be treated a resident for tax purposes.

Directors' fees

• Boxes 632 / 633 (Row D): the total gross directors' fees collected in the year from a foreign source. The taxpayer attaches a statement indicating the gross amount collected and the payer of the directors' fees.
• Boxes 636 / 637 (Row D): the expenses incurred by the taxpayer in relation to the directors' fees from a foreign source. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).

Attendance fees

• Boxes 640 / 641: the total gross attendance fees collected in the year from a foreign source. The taxpayer attaches a statement indicating the gross amount collected and the payer of the attendance fees.
• Boxes 644 / 645: the expenses incurred by the taxpayer in relation to the attendance fees from a foreign source. Operating expenditures include, in particular, travel expenses and out-of-pocket expenses. In this regard, the taxpayer may deduct either the actual operating expenses, providing supporting documents, or opt for the flat-rate allowance (without supporting documents).