Employers who hire a job seeker may be entitled to receive tax relief.
Applications must be submitted to the National Employment Agency (Agence pour le développement de l'emploi – ADEM).
This financial aid is available to:
The following are not eligible for this financial aid:
For the employer to be entitled to tax relief, the job seeker hired must:
The tax relief can also be granted in the case of:
* In this case, the placement periods in the employment programme before hiring will be taken into account in the compulsory registration period of 6 months with ADEM.
The tax relief is not granted to employers who:
The employment contract offered to the worker must be:
The contract must be for at least 16 hours per week.
The employer must submit a request for tax relief for hiring an unemployed person to ADEM.
The request must be accompanied by a copy of the employment contract.
At the beginning of the financial year following the employment of the job seeker (and for each subsequent financial year), ADEM shall issue a "certificate confirming the placement and continuation of the job" (certificat attestant le placement et la continuation de l'emploi).
The aid measures an employer can receive for the integration and professional training of job seekers can not be cumulated with the tax relief.
Examples of aid measures that can not be cumulated:
In order to receive the tax relief, employers must include the following documents with their tax return to be submitted to the Luxembourg Inland Revenue (Administration des contributions directes - ACD):
The tax relief may be awarded for a maximum duration of 12 months, provided that the employment contract is maintained throughout this period.
In the event of termination of the contract, the employer shall cease to be entitled to the tax relief as of the month of such termination.
The tax relief is deducted from the income tax due with respect to the fiscal year in which the remuneration was paid.
Should the level of tax be too low, the unused tax relief can be deducted from the tax payable in respect of the next 10 fiscal years.
The monthly tax relief shall amount to 10 % of the gross monthly remuneration which is deductible as an operating expense.