Luxembourg: Tax classes and taxation of couples, what the Administration says

In Luxembourg, a resident falls into one of three tax classes: 1, 1a, or 2. Spouses and partners taxed jointly are in class 2, which uses a split tax system: the tax is double the basic rate calculated on half of their income. Resident spouses can also opt for individual taxation, a practice that has been available since the 2018 tax year. The pages of the Luxembourg Inland Revenue (ACD) consulted for this information show update dates from 2016 to 2026, indicated on each page.

This page deals with resident categories and the taxation of couples. It does not cover the 2026 tax rates, details of transitional periods, the current child tax relief amounts, or the impact of these rules on your French situation. Residency is determined first from the Luxembourg perspective and then from the French perspective: see "Living in Luxembourg: Taxation and Tax Residency".

The three classes for residents

Source: ACD, "Tax classes of resident taxpayers", updated on 16/07/2025.

Since 2008, according to the ACD (page "Child Tax Relief," October 26, 2023), child tax relief no longer directly changes the tax class: only classes 1, 1a, and 2 exist. A child belongs to only one tax household per year. The €922.50 tax relief per child mentioned on this 2023 page is granted upon request, up to the amount of tax owed; the exact amount should be verified on the current page before any decision is made.

Spouses: class 2 by default, individual taxation upon request

Resident spouses are taxed jointly, in class 2. Joint taxation is automatic in three cases, according to the ACD:

• resident spouses who are not separated by court or legal decision at the beginning of the tax year; ;
• residents who get married during the year; ;
• spouses who become residents during the year and are not separated.

Spouses who meet the requirements can jointly request individual taxation, starting with the 2018 tax year. Each spouse is then in tax class 1. There are two variations:

In the event of disagreement between the spouses, neither option is possible. The request requires a declaration, to be filed no later than December 31 of the year following the tax year. It can be revoked or amended until that same date; after that date, the spouses are taxed jointly. Source: ACD, "Individual Taxation of Married Taxpayers," July 25, 2025.

Class 2 splitting

According to the ACD (page dated 22/01/2025), class 2 tax is double the tax calculated using the basic rate on half of the adjusted taxable income. The formula is: class 2 tax = 2 x class 1 tax / (adjusted income / 2).

The page gives an example for the year 2025, excluding contribution to the employment fund: adjusted taxable income of €100,000, class 1 tax on €50,000 of €7,341, class 2 tax of €14,682.

The 2025 base rate and the first tranche

The basic rate of class 1 is applicable from the tax year 2025. It has 23 brackets: 0 % up to €13,230, then 8 % from €13,230 to €15,435, and so on up to 39 % from €54,090 to €117,450, 40 % up to €176,160, 41 % up to €234,870 and 42 % beyond (page of 17/01/2025). Another page of the ACD (17/01/2025) indicates a first exempt tranche of €13,230 in class 1 and €26,460 in classes 1a and 2, without specifying the year.

In addition to income tax, there is a contribution to the employment fund: 7 %, or 9 % for income exceeding an adjusted taxable income of €150,000 in classes 1 and 1a, or €300,000 in class 2 (page dated 13/02/2024). No page consulted provides a rate specific to 2026.

The partners

The Luxembourg tax authorities (ACD) treat partners (partnerships under the law of July 9, 2004, whether Luxembourgish or foreign) separately. They can, upon joint request, be taxed jointly in tax class 2, provided two conditions are met: they must share a common home or residence for the entire tax year, and the partnership must have existed for the entire year. The request is made in the tax return (form 100), signed by each partner. The application does not specify a deadline.

Proof of partnership: certificate from the public prosecutor's office for a Luxembourg partnership, upon the first joint application; document from the state of registration for a foreign partnership. Without an application, the partners are in tax class 1 (two households) or 1a if the household includes children eligible for tax relief. Since 2018, partners who can apply for joint taxation can choose individual taxation with reallocation; individual taxation without reallocation is not provided for by law for them. Source: ACD, "Partnership", 25/07/2025.

When one of the spouses is not a resident

A married non-resident is in tax class 1 by default. According to the Luxembourg Inland Revenue (25/07/2025), a married couple, one spouse resident and the other non-resident, can jointly apply for tax class 2 if the resident spouse earns at least 90% of the household's professional income in Luxembourg during the year. A married non-resident can also apply to be treated as a resident (Article 157ter of the Income Tax Law, cited by the Luxembourg Inland Revenue) if at least 90% of their worldwide income is taxable in Luxembourg. A separate tax regime exists for Belgian residents. These conditions are assessed annually; the tax return must be filed by December 31 of the following year.

For non-residents, the ACD maintains a separate page (updated on 26/06/2026). It places non-residents with other taxable income in class 1, with a rate that cannot be less than 15 %, except for the exemption provided for in Article 157, paragraph 5a, of the Income Tax Law, the conditions of which are not detailed on the page.

Widowhood and divorce

The death of a spouse terminates joint taxation. According to the ACD (Tax Administration), the widower, under certain conditions, falls under tax class 2 for the following three tax years, and then generally under tax class 1a. For a divorce, individual taxation only takes effect from the year following the year the divorce is granted. Divorced or separated individuals may fall under tax class 2 for a transitional period, provided they have not benefited from this provision during the previous five years. The pages on "widower" (2020) and "divorce" (2016) are outdated and refer to detailed pages not reproduced here: the exact conditions should be verified at the source.

Numerical example (fictitious profile)

Situation. A fictitious married couple is resident in Luxembourg. Their joint adjusted taxable income is €120,000 for a tax year subject to the basic rate 2025.

Issue. Measure what class 2 changes compared to a direct application of the basic rate to the entire income.

Strategy. Apply the ACD formula: 2 x basic rate tax on €60,000.

Result. The basic tax rate on €60,000 is €11,164.50. Class 2 yields €22,329. Applying the basic rate to €120,000 would result in €34,590, an increase of €12,261. These amounts are calculated before the employment fund contribution, without any reduction or deduction, and are valid only for this hypothetical profile. The calculation mirrors the example of the ACD (€7,341 then €14,682 for €100,000).

What changes depending on your situation

• Your family situation married, partner, widowed, divorced or single, with or without children eligible for moderation.
• Your home : resident, non-resident, or non-resident spouse, with the threshold of 90 % for class 2.
• The individual taxation option : possible for spouses since 2018, with or without reallocation, depending on the couple's agreement.
• Income distribution : the reallocation is presumed to be 50/50 but may be decided otherwise.
• Income level : the contribution to the employment fund increases from 7 % to 9 % beyond different thresholds depending on the class.

These points are examined on a case-by-case basis. No result can be announced without this examination.