Tax Measures for Luxembourg entities and Employees
On March 17, 2020, as part of the implementation of these measures, the Luxembourg tax authorities made several positive announcements for Luxembourg taxpayers. These announcements were then followed on April 3, 2020 by a draft law addressing, among other things, the extension of deadlines in tax, financial and budgetary matters in the context of the Covid-19 crisis. Finally, the Luxembourg government, anticipating the potential negative tax implications for cross-border workers who have to work from home during the crisis, reached an agreement with Belgium, France and Germany in this regard.
Payment of Taxes Postponed upon Request
The Luxembourg tax authorities announced on March 17, 2020 that Luxembourg individual and corporate taxpayers who are experiencing liquidity problems due to Covid-19 and have business income, income from agriculture and forestry or income from independent professional services may be postponned under conditions
Among the others extensions we could also found the following :
Extension of Deadlines for Administrative and Judicial Proceedings
Extension of Deadlines Applicable According to Statute of Limitation Rules
Privileges and Guarantees Extended in Time
No Negative Tax Consequences for Cross-Border Employees Working from Home
Extension of Deadlines for Filing Tax Returns and Opting for Certain Tax Treatments
The Luxembourg Parliament released a Draft Law (the Draft Law) on April 8, 2020, the purpose of which is to introduce for a limited period of time a number of deadline extensions for certain legislative provisions in fiscal, financial and budgetary matters. The Draft Law follows the announcements made by the Luxembourg tax authorities on March 17, 2020 which dealt not only with the cancellation of tax advances but also with the extension of deadlines for filing 2019 tax returns.
A lump-sum allowance on expenditure on domestic services
On April 15th, 2020 by way of the Grand-Ducal Regulation, the lump-sum on expenditure on domestic services allowance is raised from the actual maximum amount of EUR 5 400.00 to EUR 6 750.00 provided that the taxpayer has incurred domestic expenses either directly, either indirectly through a company or association. This reduction may not exceed the costs incurred nor EUR 450.00 for the months of January 2020 to March 2020 and EUR 600.00 for the months of April 2020 to December 2020. These regulations come into force the day after their publication in the Official Journal of the Grand Duchy of Luxembourg and is applicable for the 2020 taxation year.
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