Continuing our coverage of the Tax Day organized by RTL and Ernster at Belle-Étoile, we delve further into the tax questions concerning many Luxembourgers. With the presence of accounting and tax experts, clear and precise answers were provided to complex questions, shedding light on the often obscure aspects of tax obligations. The RTL Steierdag is an annual event where Luxembourg taxpayers can obtain free tax advice. Organized by RTL and Ernster at Belle-Étoile, this day allows individuals to meet with accounting and tax experts to discuss tax returns and other tax issues.
Were you unable to attend? Or did you miss the radio broadcast? No worries, we have noted all the caller questions for you!
Tax Declaration for Retirees: Is It Necessary?
Rolland asks if the tax declaration is still mandatory after retirement, especially with no debts or possible deductions. “I just wanted to know how it works now that we are both retired, we have no more debts and nothing to deduct,” he inquires.
Nicole Fletscher (Grant Thornton) responds: “You still need to do it because it involves two pensions. This means one has the second card at 15%. I assume your pension income exceeds €36,000, so your taxable income exceeds €36,000. You are therefore required to file a tax declaration.”
Tax Equity Between Genders: A Misunderstanding?
Marion, intrigued by a possible tax disparity between genders, questions why women seem to be taxed more. “Why is a working woman taxed more? Why isn’t the woman taxed the same as the man, percentage-wise? Is the percentage higher for women?” she asks.
Nicole Fletscher (Grant Thornton) clarifies: “No, it’s probably because the woman has the second card. The system in Luxembourg still has two card systems for married couples. The one who earns more usually gets the first card, their salary is taxed according to the tax scale to calculate the income tax, and the second card is taxed at 15%. That’s why there’s a difference. There are discussions to change this, but it’s not finalized yet. However, for now, this two-card system exists, so married couples must file a tax return to regulate this system so that the 15% on the second card is properly taxed.”
Tax Deductions for Alimony After Divorce: What Are the Rules?
Pierre, divorced for a long time, questions the inclusion of alimony in tax declarations. “I’ve been divorced since 1992 and wanted to ask why the tax administration doesn’t consider this, why?” he wonders.
Guy Schroeder (GSL Fiduciaire) explains: “Yes, you can normally deduct them from taxes. Well, there are basically two different regimes. It depends if the divorce occurred before January 1, 1998, or after. This means if you divorced before this date, then there’s a different regime, you can’t deduct it as a special expense but can possibly deduct it as an extraordinary expense, according to the current conditions applicable to extraordinary expenses. If you are divorced after December 31, 1997, whether by mutual consent or judgment, you can deduct alimony up to a total amount of €24,000 per year.”
We hope you have already found some useful answers from what we have shared so far. If you have further questions regarding your tax situation, feel free to contact us. We are happy to assist you!