Question 1

What pension contributions can I deduct from tax in Luxembourg?

Accepted Answer

You can deduct contributions to voluntary supplementary pension plans (RCAP/RCAR). The maximum deductible amount increases with age: up to €1,500/year under age 40, rising to higher limits between 40 and 65 depending on your age bracket.

Question 2

Which insurance premiums are tax-deductible in Luxembourg?

Accepted Answer

Deductible premiums include risk life insurance, complementary health insurance, home liability insurance, and auto liability insurance. The combined annual ceiling for all insurance premiums is €672 per person in the household, including children.

Question 3

How much can I deduct for home savings (Bausparvertrag) in Luxembourg?

Accepted Answer

Contributions to a home savings plan are deductible up to €672 per year per person. For a couple filing jointly this doubles to €1,344. The plan must be with an approved Luxembourg institution and used for property purchase, construction, or renovation.

Question 4

What is outstanding balance insurance and is it tax-deductible?

Accepted Answer

Outstanding balance insurance (assurance solde restant dû) covers your mortgage balance if you die before the loan is repaid. It is deductible in Luxembourg as a special expense. The deductible amount depends on age, number of children, and whether cover is individual or joint.

Question 5

How do I claim these tax deductions in Luxembourg?

Accepted Answer

Most deductions are claimed via your annual tax return submitted to the Administration des contributions directes (ACD). Employees on Class 2 or with significant deductions must file. Others can file voluntarily if it results in a refund. Certificates from insurers and pension providers are required as supporting evidence.

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