Personal Income Tax in Luxembourg - Application and Recent Updates

The aim of this training course, which focuses on personal taxation, is to provide participants with a theoretical and practical training course that will enable them to gain a better understanding of the subject from a number of different angles. It will involve a review of the different concepts of personal taxation and the various elements involved in calculating tax. This course will enable participants to complete personal tax returns for both generic and specific cases, by putting into practice the essential elements of Luxembourg taxation. Participants will approach the course through practical exercises in the various chapters and a summary exercise.

At the end of the course, participants will be able to:

• Understand the main aspects of the Luxembourg personal tax environment
• Complete personal tax returns
• Carry out a personal tax calculation

The main themes of the course include:

• General principles of personal taxation
• The distinction between professional and private income
• Private expenses and determining net income
• The different categories of income (self-employed, salaried employment, business profits, pensions and annuities, movable capital, property rental, etc.)
• Income available
• Special expenses, tax credits and allowances
• Extraordinary income and charges
• Tax filing obligations
• Double taxation agreements (high level introduction on the principles)

More specific topics:

• The Relibi law (optional regime for the 20% withholding tax on certain interest earned on savings and paid by a paying agent established abroad)
• The home savings scheme
• Approved occupational pension scheme
• The old-age savings scheme

The latest developments in individual taxation:

• Taxation of cross-border commuters (high level comments)
• Individual taxation
• RCPI (approved occupational pension scheme for the self-employed workers)
• Exercises
• Calculating net income from employment
• Calculating net property income (main residence and rental income)
• Calculation of net income from transferable securities
• Calculation of special expenses
• Calculation of extraordinary expenses
• Calculation of adjusted taxable income
• Summary exercise with preparation of personal tax return and corresponding tax calculation