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Tax deductions

What are your tax deduction possibilities regarding insurance in Luxembourg?

In this section you will find out the different solutions and amounts you can deduct from your Luxembourg taxes.

If you want further clarification please contact us and we will be happy to respond.

 

Income brackets:

 

 

Tax is calculated based on your income bracket.

 

So the higher your income the more taxes you pay. However certain expenses can be deducted from your taxable income regardless of whether you are a resident or cross-frontier worker.

Deductible expenses include the costs of childcare, car mileage, car insurance, housing etc. which reduce your tax liability and increases your income.

 

What about your situation?

 

Do you want more information tailored to your situation? A question deserves an answer! Contact us with no obligation

 

contact us

 

 

 



There are two main types of expenses:

 

 

There are two main types of expenses:

 

1) Everyday expenses: related to the costs of childcare, car insurance and housing etc. This category includes all expenses related to daily life that are not incurred for the purpose of tax deductions.

 

2) Voluntary savings: this second type of savings allows you to subscribe to a savings plan and deduct it from your tax liability. Discover all the expenses you can deduct from savings plans and find out all about tax optimisation.

 

You can find the complete list of deductible expenses here

 



For cross-frontier workers

 

Are you a cross-frontier worker?


Contrary to popular belief, not all cross-frontier workers fall under the same taxation regime.

 

Deductible expenses for single people are practically the same for all cross-frontier workers.

 

Are you in a relationship? The total tax liability of your partner depends on their nationality.

 

Why?

 

Quite simply because countries such as Belgium, France and Germany have tax agreements with Luxembourg.

These agreements are different in each country. For example a Belgian cross-frontier worker who lives with a partner who works in Belgium has to pay more tax on their earnings than a French cross-frontier worker who lives with a partner who works in France.


Do these factors seem unclear?

Does your situation require personalised advice?

It's our job to answer all your questions: Contact us!

Your first tax return free


It's our job to make your life easier!

 

A tax return takes time and effort to complete. Weicker & Co will complete your tax return for you! Subscribe to one of our tax deductible products (life insurance, pension savings, property savings) from the company of your choice and we will complete your fully refundable tax return (value: €110).

 

do you want to find out about the benefits for you? Let's talk, a question deserves an answer :)

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Tax treatment of insurance products for Luxembourg taxpayers


A question? Any enquiries? ... A fast and personalised answer.

Choosing insurance is important. Each situation is as unique as the individual. We are always available to provide information and help you in your choice with complete independence.

Lower your taxes!

Life, Death, Disability, Health, Accident or Third Party Car, Motorbike and Home Insurance can be tax deductible. As a Luxembourg taxpayer, you can actually deduct premiums for such insurance and make a saving.

Fill out the relevant section of your tax return without delay or register the amounts on your tax card.
The maximum deductible amounts vary and are as follows:

 

Life, Death, Disability, Health, Accident and Civil Liability Insurance
Maximum deductible amounts

 

Without spouse

With spouse

Taxpayer

€ 672

€ 1 344

Taxpayer with 1 child

€ 1 344

€ 2 016

Taxpayer with 2 children

€ 2 016

€ 2 688

Taxpayer with 3 children

€ 2 688

€ 3 360

 

To be able to deduct life insurance policies in the event it reaches maturity during your lifetime the contract must have a duration of at least 10 years.

For health and/or accident insurance these limits increase by €1500 if they provide for the payment of a daily allowance in the event of incapacity for work.

 

All lump-sums paid by life, death or accident insurance are tax exempt!

Products expressed in units of account (including mutual funds) have the same tax deduction rules as 'classic' policies.

These products can be deducted if they meet two conditions:

1) Death benefit of at least 60% of the total premiums (with a minimum of 5 annual premiums)

2) or 130% of the premiums paid up to death

 

Improve your tax situation for free! No need to worry...

 

Contact us or request our 3 best life insurance offers for free and with no obligation

 

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Higher limit and increased higher limit for payment protection insurance
When the borrower takes out a temporary assurance on death with a single premium to cover a real estate loan or a mortgage, special maximum amounts are added to the normal limits.

Taxpayer

Increased limit (1)

Higher increased limit
Between 30 and 50 (per year)

Maximum deductible
€ 50 and over

Without children

€ 6 000

€ 480

€ 15 600

With 1 child

€ 7 200

€ 576

€ 18 720

With 2 children

€ 8 400

€ 672

€ 21 840

With 3 children

€ 9 600

€ 768

€ 24 960

With 4 children

€ 10 800

€ 864

€ 28 080

Per additional child

€ 1 200

€ 96

€ 3 120

How to calculate the absolute limit per taxpayer

  • basic limit: €672 + €672 for joint taxation + €672 per dependent child
  • allowance for single premium: sum of the single premium (without exceeding €3000) + €672 per child dependent
  • additional allowance: 8% x number of years over 30 (age of borrower when policy taken out) x result of b.




Pensions
Maximum additional amounts deductible.

 

Annual deduction 

 

 

Annual deduction

Under 40

€ 1 500

48

€ 2 100

40

€ 1 750

49

€ 2 100

41

€ 1 750

50

€ 2 600

42

€ 1 750

51

€ 2 600

43

€ 1 750

52

€ 2 600

44

€ 1 750

53

€ 2 600

45

€ 2 100

54

€ 2 600

46

€ 2 100

55

€ 3 200

47

€ 2 100

between 55 and 75

€ 3 200

 

There are several conditions to meet in order to take out this insurance. These are related to the new Article 111a of the Tax Code (L.I.R.)


• Minimum duration of 0 years
• Annuities and lump-sums must be paid at the age of 60, at the earliest, and the age of 75, at the latest;
• At maturity you receive a maximum lump-sum of 50% of the accrued savings, the remainder is converted into a monthly life annuity.

• In the event of death: the beneficiaries can receive the accumulated savings

• A pension makes it possible to substantially increase the deductible amount based on an annual limit which depends on the subscriber's age at the start of the tax year. When jointly taxed spouse each buy a pension product, the deductible amount is calculated individually by taking into account their age at the start of the tax year;


• Any early repayment made before the age of 60 for reasons other than disability or serious illness will result in a tax adjustment;


• Both standard products with a minimum interest rate as well as unit of account products are permitted. However specific rules have been issued for the latter by Grand-Ducal regulation. Stocks calculation

Age at the start of the tax year

Maximum overall portion of shares in the total underlying assets.

Under 45

no limit

from 45 to 49

75% of accrued savings

from 50 to 54

50% of accrued savings

55 and over

25% of accrued savings



  • the taxpayer can have multiple products but it is not possible to transfer accumulated savings from one product to another
  • tax advantages: the portion paid as a lump-sum is only taxed at half the overall rate of income tax and half of all monthly annuities are exempt from tax.

Visit http://www.impotsdirects.public.lu/dossiers/prevoyance/index.html



Do you want to know more about pension savings?

 

Do you have any questions about this type of tax deductible savings or do you want to receive the best 3 deals for free? 

 

contact us Request a quote

 

 

   
     
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