Choosing between joint taxation or individual taxation as a married taxpayer
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Certain measures of the recent tax reform have a direct impact on married taxpayers with regard to their withholding tax card (tax card) for salaries and pensions (RTS) and also in matters of taxation by assessment.
Since the tax year 2018 (1 January 2018), certain married taxpayers have the possibility to choose between joint or individual taxation.
Who is concerned?
Married taxpayers can choose between joint or individual taxation, whether they are resident or non-resident, provided the conditions for tax assimilation are met.
Prerequisites
In order to choose between joint or individual taxation, the spouses must submit and sign a joint application.
Married resident taxpayers do not need to fulfil any other requirement.
Married non-resident taxpayers, provided they are eligible, must choose to be taxed as resident taxpayers.
Deadlines
For any given fiscal year N, a choice made after 31 December N + 1 is no longer taken into account and, beyond that date, the choice made before that date is irrevocable.
Example: for the tax year 2022, the cut-off date is 31 December 2023.
Note that the choices submitted via MyGuichet.lu are processed as a priority by the Administration des contributions directes (Luxembourg Inland Revenue).
How to proceed
Resident taxpayers: principle
Since 1 January 2018, resident taxpayers who are married or who are getting married in the course of the year, will have the choice between:
- joint taxation, on the basis of tax class 2;
- pure individual taxation, on the basis of tax class 1 for each spouse;
- individual taxation with reallocation, based on tax class 1 for each spouse, with a common rate recorded on each of the spouses' tax card.
With respect to individual taxation, when there are children in the household, tax class 1 does not change, but the other advantages arising from the presence of children in the household are taken into account in accordance with the conditions linked to the type of taxation chosen.
Non-resident taxpayers: principle
Since 1 January 2018, non-resident married taxpayers are assigned tax class 1 and will be taxed on their Luxembourgish income only, if they fail to make a joint decision.
However, if they meet the conditions and choose to be treated as resident taxpayers, they will be able to choose between:
- joint taxation, on the basis of tax class 2;
- pure individual taxation, on the basis of tax class 1 for each spouse;
- individual taxation with reallocation, on the basis of tax class 1 for each spouse.
The choice between joint taxation, pure individual taxation or individual taxation with reallocation of income results in a tax rate that is recorded on each spouse's tax card (depending on the case, this rate can be common to both spouses or be individual).
With respect to individual taxation, when there are children in the household, tax class 1 does not change, but the other advantages arising from the presence of children in the household are taken into account in accordance with the conditions linked to the type of taxation chosen.
Taxpayers who have chosen to be treated as resident taxpayers are required to file a tax return.
How to notify the authorities of your choice
The choice of type of taxation can be made , within the set deadlines:
- via an online procedure without authentication through LuxTrust or eID (Request for individualization / RTS rate), which is available on MyGuichet.lu and recommended by the Luxembourg Inland Revenue (ACD);
- by sending a specific application to the relevant department.
If no choice is made in the course of tax year N, the taxpayer can still make his or her choice after the end of the tax year at the time of filing of their tax return. The deadline for making the choice is 31 December of the year N+1.
If the taxpayers fail to make a choice, they will automatically be allocated tax class 1 and are taxed on their Luxembourg-source income only.
Please note that choices submitted via the online procedure will be given priority by the Luxembourg Inland Revenue (ACD).
Online services and forms
Who to contact
Luxembourg Inland Revenue (ACD)
-
Luxembourg Inland Revenue (ACD)
- Address:
- 33, rue de Gasperich L-5826 Hesperange Luxembourg
Please consult the above website to find the competent department.
Related procedures and links
Procedures
Links
Further information
Legal references
concernant l'impôt sur le revenu
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