When an employer pays salaries to his employees, he must apply a withholding tax at source with regard to income tax. Even though the withholding tax is levied on behalf of the employee, the employer is personally responsible for the tax deducted.

In order to carry out the tax deduction and the transfer of the employee's tax credit, the employer needs a tax deduction document (called a 'tax card') for each employee and which details the relevant deductions to be made.

If he does not have the employee's tax card, the employer must apply the highest tax rate, i.e. on the basis of tax class 1 and a 33 % tax rate. When the employer receives the tax card he must proceed with the correction of the tax rate used, if applicable.

Therefore, it is useful to inform an employee about the necessary formalities required to obtain his tax card.

The tax card is only valid for the tax year for which it is established.

The procedure to follow for an employee differs according to whether he is a resident or non-resident in Luxembourg and whether it is his first or a subsequent application.

Who is concerned

Every employee must submit a tax card to each of his employers.

The employer must be in possession of the employee's tax card in order to carry out the correct tax deduction on the employee's salary.

How to proceed

Type of tax card and tax deduction

Main tax card / additional tax card

When both persons in a married couple of employees or pensioners receive a taxable salary/pension in Luxembourg, the person with the highest and more stable income (main income) receives the main tax card (1^st tax card) registered in tax class 2. The other spouse receives the additional tax card (2^nd tax card) registered in tax class 2 and with a fixed withholding tax rate (15 % in 2013).

A worker who has several employers must submit a tax card to each of his employers. The main tax card must be given to the employer who pays the highest and more stable salary (main income). All other employers receive an additional tax card. Additional tax cards can be recognised by the indication of a fixed tax rate (e.g., tax class 1: 33 %, tax class 1A: 21 %, tax class 2: 15 %).

In the event the main tax card is not allocated to the highest and more stable income, the taxpayers can submit a request to the competent tax office to have the main tax card changed into the additional tax card. The taxpayers must provide the necessary supporting documents (e.g. salary slips) which show their income and must submit all the salary slips received for the year concerned.

Registration of tax deductions on the tax card

Upon request, an employee or pensioner can have certain tax deductions recorded on the tax card so that they can be taken into account when the employer or the pension fund calculates the net amount to be paid to the taxpayer.

Resident taxpayers have the possibility to request the following to be recorded on their tax card:

• additional professional expenses (fees);
• single-parent tax credit;
• debit interests;
• arrears and permanent expenses related to a divorce;
• premiums paid in respect of an old age pension fund;
• payments for a home savings scheme;
• certain extraordinary expenses (related to illness, death, parents in need, disability, domestic services, etc.).

Debit interests in relation to the purchase of a home cannot be recorded on the tax card and they will only be taken into consideration if a tax return is submitted.

Tax reductions recorded on the tax card are only valid for the year for which they were requested. Request must be renewed each year and it will be checked if the conditions are still met.

Application as a resident employee

As from the tax year 2013, tax cards for resident employees and pensioners are automatically established by the competent RTS tax office.

The tax card is sent by post to the recipient at the beginning of 2013. It is not possible to collect the tax card directly from the RTS tax office.

Taxpayers who have not received their tax card by 1 March 2013 should contact the competent RTS tax office.

As a general rule, the tax card for resident taxpayers will be automatically established without intervention and request from the taxpayer in the following cases:

• new registration with the Joint Social Security Centre (CCSS) of an employee by the employer;
• a change in civil status;
• an address change.

Application as a non-resident employee

First job in Luxembourg - non-resident employee

A non-resident employee who undertakes paid employment for the first time in Luxembourg must, the year he starts this activity in Luxembourg, submit an application for a tax card for non-residents at the tax office RTS for non-residents.

The application must be accompanied by the following documents:

• address: household composition certificate / residence certificate (for French residents, a copy of an electricity or gas bill);
• marital status:
  • either a copy of the certificate of marriage;
  • or a copy of the separation order or of the minutes of the first appearance or of the separation judgment or of the waiver of the obligation to live together or of the non-conciliation order signed by a judge;
  • or a copy of the divorce decree;

For separated spouses or spouses who are going through divorce proceedings, a copy of the judgment of first appearance or of the first order of the summary judge or any equivalent document, if they have not showed it yet.

• For spouses of civil servants who fall under the EU protocol or NATO status: a copy of the confirmation of their status and of their country of residence.;
• For applicants to a reduced rate: copies of the last 3 salary slips with the mention "prière de reconsidérer mon taux au plus bas" (please reconsider my lowest rate).

The Luxembourg Inland Revenue is entitled to request more additional documents.

The tax office prepares and updates within 30 days the tax card of the non-resident salaried worker in accordance with the information provided on the application for a tax card for non-residents and the documents provided.

When an employee takes a job for the first time in Luxembourg, the information on the tax card must correspond to the effective situation at the time the tax card is drawn up.

The following years

A salaried worker who continues to work in Luxembourg the year following the beginning of their activity does not need to send a new application. Each year, around mid-November, the employee receives a partially completed application for a tax card for non-residents form. He must complete it, attach the required documentation and return it within 15 days to the tax office RTS for non-residents.

The tax office prepares and updates within 30 days the tax card of the non-resident salaried worker in accordance with the information provided on the application for a tax card for non-residents and the documents provided.

The tax card is, in principle, sent to the domicile of the person concerned during the first quarter of the relevant year.

Upon receipt of the tax card. the employee must check that his data is correct, request a correction if necessary and then return the card to his employer.

Modification of data on the tax card

On receipt of the tax card, the employee must check the accuracy of the data on it.

Given that employee and employer are not allowed to make any changes to this data, any request for correction must be sent to the competent authority which drew up the tax card without delay.

In the event of a change of civil status, family situation or employer which may affect the tax class, the data on the tax card will be changed:

• automatically by the RTS tax office for resident employees;
• upon request to the RTS tax office for non-residents for non-resident employees.

The administration will then issue a new tax card. The employee must submit it to his employer as soon as possible, who must take into consideration the changes when calculating future salaries.

Additional tax cards

When an employee takes on an additional job or his spouse starts a new job, he must request an additional tax card from the relevant administration:

• resident employees must request it from the RTS tax office;
• in the case of a non-resident employee: by sending an application for a tax card for non-resident employees to the tax office RTS for non-residents.

The Luxembourg Inland Revenue will issue a new tax card as well as an additional tax card. The employee must return the appropriate tax card to his employer as soon as possible. The employer must consider any changes when calculating future salaries.

In the case of collective taxation, the main tax card is issued in the name of the spouse who receives the most stable pay and who earns the highest annual amount. The other spouse receives an additional tax card.

If the employee works for several different employers, he gives the main tax card to his main employer (most stable pay and the one with the highest annual amount) and the additional tax cards to his other employers where he earns additional salaries.

Forms / Online services

Who to contact