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🌐 Cross-border workers

Tax class and cross-border workers: what you need to know

Your tax class determines the scale applied to your income and therefore, in practice, the tax withheld at source.

The classes in brief

  • Class 1: in principle, single people with no dependent children.
  • Class 1a: notably single people with a dependent child or older taxpayers, subject to conditions.
  • Class 2: in principle, married couples taxed jointly (subject to conditions for cross-border workers).
Reforms under way

The tax class rules are changing (notably around individualisation). The applicable arrangements depend on the tax year: it is wise to have your situation confirmed.

Married cross-border worker: is class 2 automatic?

Not always. For a cross-border couple, access to class 2 and joint taxation depends on criteria (for example the share of household income taxable in Luxembourg). A tax return can allow your final tax to be adjusted against the amount withheld.

We help you understand your class and check whether taking action is worthwhile in your case.

General information, subject to legal and contractual conditions and your personal situation; to be confirmed with the ACD (Luxembourg tax authority) or a qualified professional.

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How does the 90% threshold work?The well-known 90% threshold determines whether a cross-border worker can be treated as a Luxembourg resident. Here’s the principle. Resident-equivalent status: what are the conditions?Becoming a “resident-equivalent” gives access to a resident’s deductions. We set out the conditions and what changes. Cross-border worker: is it worth filing a tax return?Filing isn’t always mandatory, but it’s often worthwhile. The cases where a tax return can work in your favour.