In Luxembourg, the social security system is based on several independent public organisations, which insure against occupational risks and organise the insured persons in socio-professional groups.
The social protection system covers the risk of sickness, maternity, disability, death, old-age, occupational accidents and travel. In addition, insured persons enjoy other benefits such as family allowances and unemployment benefits.
Self-employed persons are required to affiliate with the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS) which handles the data, registration of affiliations and collection of contributions for the different insurance funds. The CCSS acts as the point of contact for insured persons.
They can voluntarily join the employers’ mutual insurance scheme (Mutualité des employeurs) to meet any financial costs resulting from a loss of income due to sickness.
Under certain conditions, family members may also benefit from this health insurance as co-insured persons.
Who is concerned
The following self-employed persons must be affiliated with the social security:
- persons who carry out a professional activity on their own account (in their personal name), which falls within the competence of:
- self-employed intellectual workers, who can be divided into:
- liberal professions subject to a business permit (engineers, architects, chartered accountants, surveyors, patent attorneys, economic advisors, etc.),
- liberal professions subject to other laws (physicians, dentists, veterinary surgeons, lawyers, auditors, chemists, etc.);
- other professions not subject to any business permit.
Managers of companies with a commercial, trade, agricultural or intellectual objective are considered to be self-employed persons (holding the business permit) if they are:
- partners of a partnership (société en nom collectif - SENC), a limited partnership (société en commandite simple - SECS) or a limited liability company (société à responsabilité limitée - SARL) holding more than 25 % of the company shares;
- members of the board of directors to whom the day-to-day management is delegated in the case of public companies (société anonyme - SA), partnerships limited by shares (société en commandite par actions - SECA) or cooperative companies (société coopérative - SC).
Each of these persons can, if they so desire, join the employers' mutual insurance scheme (Mutualité des employeurs) on a voluntary basis.
Unpaid business activities exercised as a main or accessory activity and where the business income does not exceed 1/3 of the annual minimum social wage, do not have to affiliate with the social security. These persons may nevertheless register for social security insurance upon request provided they are resident in Luxembourg.
Non-EU nationals that wish to work as self-employed persons and to reside in Luxembourg must first apply for a residence permit for a self-employed person.
Natural persons wishing to carry out a self-employed activity subject to a business permit must first request a business permit. They can register for social security at the time they collect their business permit at the CCSS.
How to proceed
Registering as a self-employed person
Self-employed workers affiliate directly by sending a declaration form for self-employed persons to the CCSS. In order to do this and if the business permit application was submitted online, applicants may use the pre-filled form which is automatically generated in the business eSpace.
Persons treated as self-employed workers (managing partner holding more than 25 % of the company shares or managing director) must use the declaration form for salaried workers and not the declaration form for self-employed persons, even though they have self-employed status.
Persons affiliated as self-employed persons can concurrently hold the position of company manager and salaried worker in the same company.
In addition to registering with the CCSS, a non-resident self-employed person must also register with the health insurance fund of his country of residence.
Adapting the contribution base to forecast income
The social security contributions of self-employed persons are provisionally determined on the basis of:
- either the last known net taxable income;
- or, for a newly insured person, the social minimum wage for unskilled workers.
However, if the insured person can justify a different income, he may submit a request for adjustment of the taxable base at any time by declaring his forecast income for the coming year.
The CCSS sends out a letter every year which states the income that will be used for the calculation of the level of contributions and also reminds the insured person that they can request the adjustment of their contribution base where appropriate.
When the Luxembourg Inland Revenue (Administration des contributions directes - ACD) establishes the net income for the financial year in question, the corresponding social security contributions are recalculated to establish the final tax statement.
If the self-employed person carries out the activity as an ancillary activity, i.e. in addition to another main activity, the social contributions for the ancillary activity are calculated based on 1/3 of the social minimum wage.
However, where the self-employed worker declares professional income below 1/3 of the social minimum wage, he may request an exemption for insignificant income in order to be released from health, accident and pension insurance contributions.
If the self-employed person carries out an activity on an occasional and irregular basis for a predetermined period of time not exceeding 3 months per year, he may request an exemption for occasional activity in order to be released from health and pension insurance contributions.
Accident insurance contributions remain mandatory.
The occasional activity must be the only activity carried out by the self-employed person.
The contribution exemption does not apply to occasional but regular activities (e.g.: each Saturday for a period not exceeding 3 months in total per year).
Voluntary membership to the employers' mutual insurance scheme
Self-employed persons and members of their family registered as assisting family member can join the employers' mutual insurance scheme (Mutualité des employeurs) voluntarily in order to meet any financial costs resulting from a loss of income in the event of sickness.
For self-employed persons already affiliated to social security, a voluntary application for self-employed persons for affiliation to the employers' mutual insurance scheme must be presented before 1 January of a given year and the insurance provides cover as from this date.
In the case of a first affiliation or new affiliation after an interruption of at least 12 months, membership of the mutual insurance scheme will become effective upon affiliation to the CCSS as a self-employed person.
The insured person can end the voluntary insurance on written request and it will automatically cease in the case of non-payment of contributions on two successive due dates.
Affiliation of co-insured persons
Family members who depend on the self-employed worker benefit from health insurance as coinsured persons on condition that they are not personally registered.
The conditions for coregistration under one insurance scheme vary depending on whether the insured person is resident or non-resident.
Where there are several main insured persons (e.g.: a family with children where both parents work), co-insured persons are covered by the oldest main insured person.