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Last updated more than 5 years ago
Generally speaking, joint taxation of civil partners gives rise to a reduction in the partners' overall tax burden when one of the civil partners has little or no income.
For the purposes of direct taxes in Luxembourg, civil partners are precluded from joint monthly taxation at source, and their tax cards are unaffected by their partnership.
Resident or non-resident taxpayers bound by a civil partnership formed in Luxembourg or abroad are only taxed jointly after the year has ended, by assessment, at their request, by filing the 'form 100' income tax return.
Resident or non-resident civil partners who opt to be taxed jointly are treated, for tax purposes, in the same way as married couples. They are subject to the following tax benefits in particular:
Should the civil partners decide not to opt for joint taxation, they will be liable for taxation on the basis of their individual incomes.
Under certain circumstances, same-sex couples married abroad may, upon joint request, be taxed jointly.
Under certain circumstances, partners in a civil partnership formed in Luxembourg or abroad may, at their request, opt for joint taxation. They will then be eligible for taxation in tax class 2 for the entire tax year.
In tax class 2, tax is calculated using the "splitting" method:
Taxpayers who are taxed jointly are jointly and severally liable for the payment of tax.
Tax cards are not affected by civil partnerships. Where both civil partners are employees in Luxembourg (or both receive a pension that is taxable in Luxembourg), they are not required to carried out any particular formalities with respect to their tax cards (carte d’impôt).
The same is true if only one of the civil partners is an employee (or pensioner) in Luxembourg.
Neither of the civil partners employed (or receiving a pension) in Luxembourg is eligible for taxation in tax class 2 while their tax card is being issued or amended, regardless of whether their civil partnership has existed for the entire tax year or not.
Under certain circumstances, partners in a civil partnership formed in Luxembourg or abroad may, at their request, be taxed jointly by filing a tax return. They would then be eligible for taxation in tax class 2.
To be taxed jointly, the civil partners must satisfy 3 conditions:
Civil partners may not be taxed jointly for the year in which the civil partnership is registered, or for the year in which the partnership ends.
When submitting their first request for joint taxation, civil partners must enclose the following with their tax return:
Civil partnerships can also be registered with the Luxembourg civil register. For purposes of direct taxes, such registration is not a requirement.
In filing their tax return, civil partners must report all of the income they earned in the year. They are eligible for the following tax benefits in particular:
The extra-professional allowance applies to civil partners:
The extra-professional allowance is granted automatically by the Luxembourg Inland Revenue. Consequently, the civil partners do not need to apply for the allowance in their tax return.
On the other hand, where one of the civil partners has been retired for fewer than 3 years and the other civil partner receives earned income, the extra-professional allowance can be claimed by ticking box P2 on page 8 of the tax return form.
Civil partners who have requested joint taxation for a given year may withdraw their request on an individual basis provided that the tax assessment for the year in question has not yet been issued.
Civil partners who do not file a joint tax return can file a tax return individually to report their own income. In that case, they will not be taxed jointly and each civil partner will be taxed in class 1 or 1A, as applicable.
Civil partners who do not wish to be taxed jointly, or who do not satisfy the 3 conditions required for joint taxation (see above), will be taxed individually as if they were single.
If one civil partner fails to submit a tax return, they can submit an application to have the tax withheld from their salary (or pension) adjusted by means of an individual annual adjustment.
Under certain circumstances, partners in a civil partnership formed in Luxembourg or abroad may, at their request, opt for joint taxation. They will then be eligible for taxation in tax class 2 for the entire tax year.
In tax class 2, tax is calculated using the "splitting" method:
Taxpayers who are taxed jointly are jointly and severally liable for the payment of tax.
Where both civil partners are employees in Luxembourg (or both receive a pension that is taxable in Luxembourg), they are not required to carried out any particular formalities with respect to their tax cards in the event of civil partnership.
The same is true if only one of the civil partners is an employee (or pensioner) in Luxembourg.
Neither of the civil partners employed (or receiving a pension) in Luxembourg is eligible for taxation in tax class 2 while their tax card is being issued or amended, regardless of whether their civil partnership has existed for the entire tax year or not.
Under certain circumstances, partners in a civil partnership may, at their request, be taxed jointly by filing a tax return. They would then be eligible for taxation in tax class 2.
To be taxed jointly, the civil partners must satisfy the following conditions:
Civil partners may not be taxed jointly for the year in which the civil partnership is registered, or for the year in which the partnership ends.
When civil partners file their first request for joint taxation, they must enclose, with their tax return, the document issued by the relevant authorities in the state in which the civil partnership was registered, attesting that the civil partnership had existed for the entire tax year in question. Note that the 3 countries that have borders with Luxembourg all recognise some form of civil partnership, namely:
Civil partnerships can also be registered with the Luxembourg civil register. For purposes of direct taxes, such registration is not a requirement.
In filing their tax return, civil partners must report all of the income (domestic and foreign) they earned in the year. They are eligible for the following tax benefits in particular:
The extra-professional allowance applies to civil partners:
The extra-professional allowance is granted automatically by the Luxembourg Inland Revenue. Consequently, the civil partners do not need to apply for the allowance in their tax return.
On the other hand, where one of the civil partners has been retired for fewer than 3 years and the other civil partner receives earned income, the extra-professional allowance can be claimed by ticking box P2 on page 8 of the tax return form.
Civil partners who have requested joint taxation for a given year may withdraw their request on an individual basis provided that the tax assessment for the year in question has not yet been issued.
Civil partners who do not file a joint tax return can file a tax return individually to report their own income. In that case, they will not be taxed jointly and each civil partner will be taxed in class 1 or 1A, as applicable.
Civil partners who do not wish to be taxed jointly, or who do not satisfy the 5 conditions required for joint taxation (see above), will be taxed individually as if they were single.
If one civil partner fails to submit a tax return, they can submit an application to have the tax withheld from their salary (or pension) adjusted by means of an individual annual adjustment.