Annual adjustment: get back your overpaid tax
Skimming?
We've prepared the shortcut for you.
It's for you if
- You are an employee or pensioner, resident or cross-border worker, and you are not required to file a tax return for your 2025 income (check with our guide tax return or annual adjustment).
- Your 2025 was irregular: first job, months without salary, part-time, change of employer.
- You have deductible expenses that your tax card (the ACD document stating your tax class to your employer) did not take into account.
Not for you if you are required to file a tax return, if you want to deduct mortgage interest, or, as a cross-border worker, if you are aiming for tax assimilation, the single-parent tax credit (CIM), or deducting donations: that requires form 100.
Key figures
| Item | Value | Year |
|---|---|---|
| Annual adjustment deadline | 31 December 2026 | 2025 income |
| 2024 income | past deadline since 31 December 2025 | 2024 income |
| Form | 163 R (resident), 163 NR (cross-border worker) | 2025 form |
| Fixed rate on additional tax card (for your 2nd employer) | 33% (class 1), 21% (class 1a), 15% (class 2) | 2025 and 2026 |
| Mandatory tax return threshold with an additional tax card | €36,000 in taxable income (€30,000 in class 1a); cross-border worker: only after 9 consecutive months in Luxembourg | 2025 income |
| Cross-border worker or arrived mid-year: less than 9 months of continuous work in Luxembourg | your foreign income counts toward setting the tax rate, unless at least 75% of your gross annual remuneration (including replacement benefits) is taxable in Luxembourg | 2025 income |
Sources: ACD, annual adjustment (ouvre dans un nouvel onglet) and forms 163 (ouvre dans un nouvel onglet).
Is it worth it for you? Two resident cases
Methodology: monthly taxable income, 2025 class 1 tax scale published by the ACD (including 7% employment fund contribution, excluding tax credits), and monthly withholding calculated as annual tax on 12 times monthly salary, divided by 12. This gives an indication: your actual figure depends on your remuneration certificate (the annual salary summary provided by your employer).
Case 1: Léa arrives in July. Fresh out of school with no previous income, she starts on 1 July 2025: €4,000 taxable per month, class 1.
- Monthly withholding: tax on €48,000 (€7,116) ÷ 12 = €593
- Withholding over 6 months: 593 × 6 = €3,558
- Tax actually owed on €24,000: €1,145
- Overpayment: around €2,413
Her entire income for the year is from Luxembourg, so the calculation remains simple. Had she earned a salary abroad before arriving, it would enter into the rate calculation (see Case 3).
Case 2: Tom changes employer. Class 1: €3,000 taxable per month from January to June, then €6,000 at a second employer from July to December.
- 1st half withholding: tax on €36,000 (€3,458) ÷ 12 × 6 = €1,729
- 2nd half withholding: tax on €72,000 (€16,953) ÷ 12 × 6 = approx. €8,477
- Total withholding: approx. €10,205, for tax owed on €54,000 of €9,442
- Overpayment: around €760
The tax scale increases in brackets: well-paid months are withheld at a higher rate that lower-paid months do not offset. The more uneven your months, the more the annual adjustment yields. Conversely, if you have the same employer and same salary all year without special expenses, withholding is already close to accurate, and the gain will be minimal.
Signs you probably overpaid
- You started working mid-year, or had months without salary or with variable pay: the ACD cites these two cases as examples.
- You had a second job at the same time, taxed at the fixed rate on your additional tax card, without exceeding the €36,000 threshold (€30,000 in class 1a).
- As a resident, you paid for childcare expenses, registered household help, 111bis pension contributions, or home savings that your tax card didn't include.
- As a single-parent resident, your employer did not grant you the CIM during the year.
- You have a dependent child for whom no child tax reduction was applied during the year (no Luxembourg child benefits, for example): the annual adjustment can grant you a tax relief or allowance.
- As a cross-border worker, your travel expenses exceed what appears on your tax card.
Cross-border worker: what form 163 NR can do
The non-resident annual adjustment only applies to your Luxembourg income and allows only a limited number of deductions: travel expenses and other professional expenses, social security contributions, child allowance (amount deducted from taxable income) for children outside your household (Guichet.lu (ouvre dans un nouvel onglet)). If married, you remain in class 1: since 2018, class 2 for a cross-border worker requires tax assimilation via form 100 (page 4 of form 163 NR 2025). For everything else, you need form 100 with tax assimilation: special expenses (deductible private expenses: insurance, savings, etc.), interest, CIM, donations.
Case 3: Hugo, cross-border worker, arrives in July. He lives in Thionville, single in class 1, and starts working in Luxembourg on 1 July 2025 at €4,000 taxable per month: €3,558 withheld over six months, like Léa. With less than 9 months of continuous work in Luxembourg, an extra rule applies: unless at least 75% of his gross annual remuneration (including replacement benefits) is taxable in Luxembourg, the ACD includes his foreign income to determine the tax rate (ACD (ouvre dans un nouvel onglet)).
- If he was a student with no income: 100% of his salary is from Luxembourg, calculation identical to Léa. Overpayment: around €2,413.
- If he earned the equivalent of €24,000 taxable in France from January to June: base of €48,000, tax €7,116, average rate of 14.8%. Tax owed on his €24,000 Luxembourg income: €3,558. Overpayment: zero.
To estimate your situation, the cross-border worker simulator applies this calculation. Form 163 NR goes to the RTS Non-residents office, 21, rue Eugène Ruppert, L-2453 Luxembourg (ACD (ouvre dans un nouvel onglet)).
If your situation changes
- Marriage: between jointly taxed residents, a single adjustment per household (Guichet.lu (ouvre dans un nouvel onglet)).
- Civil partnership (Pacs): each partner files their own adjustment; joint taxation for partners requires form 100 (ACD (ouvre dans un nouvel onglet)).
- Second job at the same time: above €36,000 in taxable income (€30,000 in class 1a), an annual adjustment is no longer possible: filing a tax return becomes mandatory (cross-border worker: only if you worked in Luxembourg for at least 9 consecutive months).
- Arrival or departure from Luxembourg: in the year of the move, your foreign income may count toward setting your tax rate (see Case 3).
- Separation: also make sure to update your tax card (form 164 R, or 164 NR if you are a cross-border worker) to avoid overpaying next year (Guichet.lu (ouvre dans un nouvel onglet)).
How to file your annual adjustment, step by step
Gather your documents
Your Luxembourg salary certificates, one per employer, and foreign certificates if applicable (Guichet.lu (ouvre dans un nouvel onglet)), proof of your expenses, and your international bank account number (IBAN). The full list is in our guide on documents to gather.
Fill out online or on paper
Online, MyGuichet.lu offers an interactive questionnaire that adapts to your answers. On paper, download form 163 R F or 163 NR F from the ACD website. Married couples taxed jointly: single form for the household.
Send to the correct tax office
Residents: the RTS office responsible for your municipality. Cross-border workers: the RTS Non-residents office. By post, via MyGuichet.lu, or in the office mailbox, but not by email (ACD (ouvre dans un nouvel onglet)). To find your RTS office: which tax office.
Respect the deadline
By 31 December 2026 at the latest for your 2025 income. The ACD does not publish processing times: keep a copy of everything, and make sure your IBAN is up to date.
Common mistakes
- Filing an annual adjustment when a tax return is mandatory (for example, a second job above €36,000).
- Including mortgage interest in a 163 form: this requires form 100.
- Forgetting a salary certificate when you had multiple employers.
- Sending the form by email: the ACD does not accept it.
- Missing the deadline: for 2024, it was 31 December 2025.
Frequently asked questions
In principle, no: if the recalculated tax exceeds what was withheld, the ACD does not claim the difference. Three exceptions apply. The ACD may issue an adjustment on its own initiative in case of underwithholding. If you obtained a reduced rate on an additional tax card, the ACD automatically regularises your year, either way. And if you were actually required to file a tax return, the tax return determines your tax.
The ACD does not publish processing times. A complete file with all certificates and an up-to-date IBAN avoids delays.
Your employer issues it and can provide a copy (ACD). For a pension, request it from your pension fund.