At the Hotel Légère in Munsbach on Monday at lunchtime, Paul Schonenberg, Chairman of the American Chamber of Commerce (AMCHAN) in Luxembourg, welcomed the 80+ participants to the joint chamber tax lunch and also highlighted another upcoming joint chamber event on pensions - see www.amcham.lu and www.bcc.lu
Joanna Denton, Chair of the British Chamber of Commerce (BCC) in Luxembourg, talked about the upcoming International Bazaar taking place from 8-9 September and promoted the tombola of the British stand and the Chilli, etc., of the American stand, and encouraged all attendees to support both stands.
She also mentioned the upcoming Christmas lunches, with AMCHAM holding theirs on 6 December and the BCC on 14 December.
After the meal, Laura Foulds (Analie Tax & Consulting) and Aude-Marie Breden (Mazars) made presentations on personal taxation.
From 1 January 2018
They explained the changes that came into effect from 1 January 2018, including that couples now have the possibility of filing separate returns instead of jointly. The risk here is that the tax to be paid could be higher than if filed jointly.
Luxembourg residents should submit their tax declaration by 31 March of the following year, with an extension to 30 June. Reminder letters are send in late September for a final deadline for 30 October - in practice, the maximum deadline is 31 December.
For married non-residents, up to 50 days of working abroad (or €13,000 personal income), you must declare foreign income of the household (both professional and personal).
For self-employed (independent) workers, accrued tax returns are compulsory where one's turnover is more that €100,000. Also, historic income can now be spread over four years which can limit the impact on one's tax liability.
Laura Foulds strongly recommended for independents to keep separate bank accounts for private and personal accounts.
During 2018, France joined the "cross-border party" (29 days), with Germany at 19 days and Belgium at 24 days - the maximum number of days that can spent working outside of the Grand Duchy before Luxembourg claims to right to tax all income for that individual. If kept under these thresholds, taxation is in both countries.
Of the 10 tax circulars issued during 2018, two concern personal taxation. The first concerns crypto currencies - no accounts can be prepared in crypto currencies, but invoices can be prepared in this way.
Penalties for late filings can be €800, with a 10% surcharge in certain cases.
Voluntary disclosure (re fraud, etc.) ended in 2017; any disclosure from 1 January 2018 risks higher penalties.
Tax Deductions for 2018 Declarations
For property, deductions are available on purchase. Mortgage interest is treated differently during construction and when occupying.
Concerning capital gains, this is not applicable if the property is sold when resident or within 1 year of vacating the premises.
Standard deductions for claiming on one's tax return include €1,000 - €2,000 mortgage interest per person, €672 debit interest / insurance, €3,200 personal pension, €672 - €1,344 per person for a home savings scheme, €5,400 for childcare / housekeeping, up to €1,500 single parent tax credit, up to €300 (bicycle) and €5,000 (car) for eco-friendly transport, and up to €24,000 for alimony.