The management of the inland revenue is in contact with taxpayers when dealing with legal action in case of a claim regarding tax returns. Furthermore, it makes decisions regarding applications for reconsideration.
The taxation department establishes tax rates for taxpayers. The department is divided into different sections. In addition to the corporate and withholding tax on interest section, the taxation department has the following:
Natural persons section
This section consists of 28 offices located throughout the country. Each one is responsible for a different part of the country. Three tax offices have jurisdiction over non-resident taxpayers residing abroad:
- the Tax Office Luxembourg X has jurisdiction over non-resident taxpayers whose tax residence is in Belgium or in another country (apart from employees whose tax residence is in Germany or France);
- the Tax Office Luxembourg Y has jurisdiction over non-resident taxpayers whose tax residence is in France;
- the Tax Office Luxembourg Z has jurisdiction over non-resident taxpayers whose tax residence is in Germany;
The offices centralise income tax returns for resident and non-resident taxpayers. An officer is responsible for issuing tax returns and determining the advances to be paid, where applicable.
Section for withholding tax on wages and salaries (retenue d'impôt sur les traitements et salaires – RTS)
This section consists of 6 tax offices, which are responsible for the following:
- drawing up tax cards and calculating the withholding tax for employers and pension funds;
- determining and registering the following on the tax cards: tax reductions, changes to tax class and reductions in taxable income;
- calculating the annual statement for employees and pensioners. If taxpayers are not obliged to fill in a tax return, they can opt for the annual-statement method and can fill in a request for an income tax adjustment by the annual-statement method (as residents or non-residents).
Section on real estate valuations
The section on real estate valuations is responsible for fiscal analysis of all developed and undeveloped real estate in the country, in order to determine the land tax to be paid.
The revenue department has 3 offices. They collect taxes as well as tax advances, and send payment notices to tax debtors. These offices also report any delays in payment to initiate forced collection procedures.
The Luxembourg Inland Revenue is one of 3 tax authorities in the Grand Duchy of Luxembourg, alongside the Indirect Tax Authority (Administration de l'enregistrement et des domaines, AED) and the Customs and Excise Agency (Administration des douanes et accises).
The main role of the Luxembourg Inland Revenue is to implement the legislation on direct taxation, such as:
- determining and collecting direct taxes (personal income tax, corporate income tax, business tax, withholding tax on wages, salaries and pensions, etc.);
- determining the basis of for calculating property tax (tax valuation on all real estate properties in the country);
- determining and collecting various taxes and duties.