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Luxembourg's tax classes 1, 1a and 2 can make a difference of thousands of euros a year. Here is how marriage, civil partnership (PACS) and children affect your tax bill, and the options open to couples.
In Luxembourg, income tax depends heavily on your tax class, which is itself determined by your family situation. Two people earning the same salary can pay very different amounts depending on whether they are single, married or in a civil partnership.
| Class | Who? | Effect |
|---|---|---|
| 1 | Single, divorced or separated people without children | Standard scale, the highest |
| 1a | Single parents with a dependent child, people over 64, widowed persons | Lighter scale than class 1 |
| 2 | Married couples taxed jointly; PACS partners under conditions; recently widowed or divorced (transition period) | Tax on half the joint income (splitting), usually the most favourable |
Resident spouses are in principle taxed jointly in class 2: their incomes are added together and then split, which softens progressivity when incomes are unequal. Since 2018, couples can also opt for individual taxation (pure or with income reallocation), useful in some situations, notably cross-border ones. The option is requested via MyGuichet.lu within the deadlines set by the ACD.
Partners in a PACS (or a recognised foreign partnership) do not get class 2 on their tax card during the year. They can however obtain joint taxation retroactively by filing a joint return, provided the partnership existed throughout the year and they shared a common home.
Dependent children bring reliefs: the child bonus, the child tax moderation, the childcare allowance, and class 1a for single parents, who can additionally claim the single-parent tax credit (CIM).
Note: divorce and widowhood open transition periods in class 2. The rules are precise, so always check your own case on the official pages.
