When employers pay salaries to their employees, they must apply a withholding tax at source with regard to income tax. Although withholding tax is levied on behalf of the employee, employers are personally liable for the tax withheld.
In order to take into account any tax deduction and tax credit for their employees, the employer must be in possession of the withholding tax card which indicates the applicable withholdings for each of their employees.
In the absence of a valid tax card, the employer is required to apply the highest tax rate to the employee's remuneration, i.e. on the basis of tax class 1 and where the rate cannot be lower than 33 %. Employers who receive the tax card later on, must proceed with the correction of the tax rate used, if applicable.
For this reason, it is useful to inform an employee about the necessary formalities required to obtain their tax card.
Withholding tax cards issued by the Luxembourg Inland Revenue (AED) until 30 April 2021 were valid only for the tax year for which they were issued.
Effective 1 May 2021, the ACD has introduced electronic multi-annual cards. These cards no longer have an end date (except for fixed-term contracts) and are multi-annual. They remain valid until there is a change in an item on the tax card (change in tax class, change in an allowance or deduction, etc.).
Taxpayers who have received a multi-annual withholding tax card will not receive a new card at the beginning of the following years if there are no changes.
As of 1 January 2022, taxpayers are no longer required to submit their original tax card to their employer or to the body responsible for granting unemployment or re-employment benefit. An electronic version of the tax card is provided to the employer by the ACD.
The applicable administrative procedure is different depending on:
- whether the employee is a resident in Luxembourg or not; and
- whether it is the employee's first application for a tax card or a subsequent application.
Who is concerned
All employees must have a tax card for each of their employers.
The tax card is, in principle, not necessary for:
- pupils and students hired for occasional work during the school holidays and whose hourly pay net of tax and social contributions does not exceed EUR 16;
- persons hired in a private household for housekeeping, childcare or to provide necessary help and care to people dependent on such support;
- from 1 January 2022, temporary agency workers (interim workers). Their salaries are subject to a flat tax on income of 10 %. Temporary agency workers with a gross hourly wage in excess of EUR 25 have to request their tax card by submitting the form 162 F to the competent RTS office. The withholding tax is determined according to the common tax scheme.
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 (1st tax card) which will be registered in tax class 2. The other spouse receives the additional tax card (2nd tax card) registered in tax class 2 and with a fixed withholding tax rate.
Employees who have several employers must submit a tax card to each of their employers. The main tax card must be given to the employer who pays the highest and most stable salary (main income). All other employers receive an additional tax card. Additional withholding tax cards can be identified as such by the entry of a fixed withholding tax rate (for example: 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 most stable income, taxpayers can submit a request to the competent tax office to have the main tax card changed into an additional tax card. For this to happen, taxpayers must:
- provide the required supporting documents (salary slips for example) which state the amount of their income; and
- attach all the statements 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 interest: only in connection with consumer loans - special expenses (DS);
- divorce-related arrears on payments and permanent expenses (DS);
- payments into a home savings scheme (special expenses);
- certain extraordinary expenses (CE): sickness, dependent relatives, disability, domesticity costs, childcare costs, child not belonging to the taxpayer's household, etc.;
- insurance contributions and premiums (DS);
- flat-rate travel expenses (FD);
- the deduction of the increased allowance for business expenses of disabled/impaired employees (a copy of the medical certificate specifying the degree of reduction of the employee's work capacity should be attached);
Debit interest in relation with the acquisition of a dwelling:
- cannot be recorded on the tax card; and
- will only be taken into account if a tax return is being submitted.
Tax reductions recorded on the tax card are only valid for the year for which they were requested. Requests must be renewed each year and it will be checked if the conditions are still met.
Application as a resident employee
Tax cards for employees and pensioners residing in Luxembourg are automatically established by the competent RTS tax office.
Tax cards are sent by post to their recipients at the beginning of the year. It is not possible to collect the tax cards directly at the RTS tax offices that issue them.
Taxpayers who have not received their tax card within 30 working days of their first day of employment with their new employer should contact the competent RTS office and inform their employer that the application is still pending.
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 with paid employment in Luxembourg for the first time must submit an application for a tax card for non-residents to the RTS tax office for non-residents during the year they start work in Luxembourg.
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);
- civil 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 judgement, 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 going through divorce proceedings, a copy of the judgement at their first court appearance, or of the first order of the summary judge or any equivalent document, if they have not presented such a document 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 persons applying for a reduced tax rate:
- copies of the last 3 salary slips with the annotation "prière de reconsidérer mon taux au plus bas" (please reconsider my lowest tax rate).
The Luxembourg Inland Revenue is entitled to request additional documents.
The RTS tax office for non-residents establishes and updates the tax cards of non-resident salaried workers within 30 days, in accordance with the information provided on the application for a tax card for non-residents and any other documents received.
When an employee takes up paid employment in Luxembourg for the first time, the information on the tax card must correspond to the effective situation at the time the tax card is drawn up. Employees must then:
- check that the data concerning them is correct;
- request corrections, if necessary.
Submission of the withholding tax card by electronic means
The Luxembourg Inland Revenue (ACD) is offering the activation of the eDelivery feature for the withholding tax card. Doing so allows taxpayers to receive this document in electronic format in their private eSpace on MyGuichet.lu.
Please note: only documents sent from the moment of subscription to this service are available.
To benefit from this service, the taxpayer must first subscribe to the eDelivery function for official documents sent by the ACD. The subscription can be made in their private eSpace of MyGuichet.lu, under 'My data' in the 'Taxation' section, under 'Subscription to ACD documents'.
This step is essential in order to receive the documents in the private eSpace.
The taxpayer receives an email as soon as a new document is posted in their private eSpace. The document can be consulted in PDF format.
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 without delay to the competent authority that drew up the tax card.
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 new tax card is provided to both the employer and the employee by the ACD. The employer must take the changes into account when calculating future salaries.
Additional tax cards
Employees who take up an additional job or if the spouse starts a new job, they 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, with the RTS tax office for non-residents.
The Luxembourg Inland Revenue will issue a new tax card as well as an additional tax card.
In the case of joint 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.
Employees who work for several different employers must give the main tax card to their main employer (most stable pay and highest annual amount) and any additional tax cards must be given to the other employers who are paying the additional salaries.
Forms / Online services
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)
Antrag auf Ausstellung, Berichtigung, Eintragung einer Ermäßigung oder Ausstellung eines Duplikates einer Steuerkarte für ansässige Steuerpflichtige (Vordruck 164 R D)
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)
Antrag auf Ausstellung, Berichtigung, Eintragung einer Ermäßigung oder Ausstellung eines Duplikates einer Steuerkarte für nicht ansässige Steuerpflichtige (Vordruck 164 NR D)