The law on income tax (L.I.R.)

Tax planning / tax optimization for Luxembourg residents and for frontier workers / cross-border workers in Luxembourg eligible for tax assimilation as a resident

• Art 111 bis LIR: tax deductions for pension savings or other complementary retirement plans (3rd pillar)

  By taking out a complementary pension plan, you can reduce your taxable income each year. The tax deduction limits are dependent on the age of the person paying in to the retirement savings plan at the beginning of the tax year.

  The tax deduction limits for a complementary retirement plan (3rd pillar) are the following:

  • 1 500 EUR before 40 years
  • 1 750 EUR between 40 and 44 years
  • 2 100 EUR between 45 and 49 years
  • 2 600 EUR between 50 and 54 years
  • 3 200 EUR between 55 and 74 years

  According to the rules of Article 111bis LIR, pension savings benefits can only be paid out from 60 years of age at the earliest and up to 75 years of age at the latest.
  Where there are two contracts (one for each partner) the tax deduction limits are doubled. The person who takes out a policy for a complementary retirement plan and the insured have to be the taxpayer.

  For more information contact your AXA Luxembourg Kirchberg insurance agency: EasyNext.

• Art 111 LIR: tax deductions for personal insurances

  Third party liability insurance (or civil responsibility insurance), accident insurance, private health insurance (also known as private medical insurance,complementary healthcare or mutual health care), life insurance, death insurance, endowment insurance, mortgage loan insurance and certain children’s savings plans or junior savings plans (which are a tax deductible alternative to a bank savings account) can benefit from tax deductions for an amount of 672 EUR per person in the household per year.

  For more information, contact your AXA Luxembourg Kirchberg insurance agency: EasyNext.

• Mortgage loan insurance / remaining balance, residual balance or outstanding balance insurance by payment of a single premium

  When such remaining balance insurance is taken out on the basis of a single premium payment, the following tax deduction limits are applicable for the year in which it is taken out:

  Tax payer	Deduction up to 30 years of age	Additional deduction from 31 to 49 years of age for each additional year	Maximum deduction 50 years of age and over
  No 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€
  For each additional child	+1.200€	+96€	+3.120€

  Do you wish to receive more information about our remaining balance insurance and the particular tax optimization treatment that can be applied? Then contact your Axa Luxembourg Kirchberg insurance agency: EasyNext.

• Payments made into a home savings plan (known as ‘épargne logement’)

  Contracts taken out in order to finance the purchase of a plot of land or the construction, the acquisition or the transformation of a property within or outside the Grand Duchy of Luxembourg.

  Thanks to the home savings plan (‘épargne logement’) from Wüstenrot, in partnership with AXA, you can obtain a mortgage loan at a favorable rate for the term of the specified loan period.

  Whether you are Luxembourg resident or a frontier worker / cross-border worker in Luxembourg and you opt for tax assimilation, the annual payments into a home savings plan are deductible from your axable income up to an amount of 672 EUR per year and per person in the household. In order to be able to take advantage of the available tax deductions, the contract has to run for a period of 10 years.

  Contact your Axa Luxembourg Kirchberg insurance agency, EasyNext, if you wish to receive more information about the Wüstenrot (‘épargne logement’) home savings plan.

• Personal contributions to a complementary pension plan (2^nd pillar)

  Personal contributions to an employer’s complementary pension plan are deductible for an amount of 1.200 EUR per year.

  If you are an employer and you wish to know what the benefits are of setting up a complementary pension plan, do not hesitate to contact your AXA Luxembourg Kirchberg insurance agency: EasyNext.