Before 31 December: what you can still do for your taxes

Two deadlines on the same day, don't mix them up

31 December closes one door on last year and another on the current year. They are not the same steps, and not the same income.

Why do payments count in the year you make them? Tax law (article 108 of the income tax law, the LIR) ties these special expenses to the year they are paid. So what you pay in January will in principle be deducted a year later (exception: a periodic premium paid just after the end of the year can still count for the year that just ended).

Last year's income: file before 31 December

The annual tax adjustment, for a simple refund

The annual tax adjustment (décompte annuel) is the short procedure for employees: modèle 163 R if you live in Luxembourg, 163 NR if you are a cross-border worker. You have until 31 December of the year after your income, so 31 December 2026 for 2025. You can do it online on MyGuichet.lu or on paper.

Good news: the Administration des contributions directes (ACD, the direct tax authority) refunds any overpayment but doesn't claim any extra tax due. So you have nothing to lose by doing it. The details are in our guide to the annual tax adjustment.

The tax return, when the adjustment isn't enough

The tax return (modèle 100) has the same deadline: 31 December of the year after, a rule in place since 2022 income. It is required for some deductions, for example the interest on the loan for your main home, which the adjustment doesn't take into account. Not sure which one applies to you? We compare the two in tax return or annual tax adjustment.

An extension is not automatic: you need to send a reasoned request to your tax office. And if the ACD sent you a letter with a different deadline, the one in the letter is what counts. If you're late, you risk a tax surcharge or a penalty payment.

To avoid depending on the post a few days before the end of the year, the easiest way is to file online on MyGuichet.lu.

This year's income: what you can still pay in

These payments lower your taxable income. What you actually save is the amount deducted multiplied by your marginal rate, the rate of your top tax bracket (we explain it in the tax scale).

Private pension plan (article 111bis): a cap raised to €4,500

This is the big change of the year. The deductible cap for a private pension plan (prévoyance-vieillesse) rises to €4,500 a year from tax year 2026 (law of 19 December 2025), up from €3,200 from 2017 to 2025. In practice: if you paid in €3,200 this year out of habit, you can still add €1,300 before 31 December.

• The cap applies per person, across all contracts: a married couple where each partner has their own contract can deduct twice.
• The contract runs for at least 10 years and pays out between 60 and 75. The ACD sets the latest signing date as the day before your 65th birthday.
• Early withdrawal, except for serious illness or disability, is taxed in full.
• Cross-border worker: the deduction goes through the tax return, provided you opt for tax assimilation.

Careful: a Guichet.lu page, last updated in 2021, still shows €3,200. The law and the ACD clearly say €4,500 for 2026. Everything else is in our private pension plan guide.

Home savings plan: €672 or €1,344 per person

Payments into a home savings plan (épargne-logement) with an approved building society are deductible up to €672 a year, or €1,344 if the policyholder is between 18 and 40 years old (completed) at the start of the year. The cap goes up by the same amount for your spouse taxed jointly with you and for each child. It's a separate cap, not shared with insurance. A contract cancelled before 10 years triggers a clawback of the tax saved. See our home savings plan guide.

Insurance and consumer credit: €672 per person

Premiums for life, death, accident, disability, health and third-party liability insurance, plus the interest on a personal loan (car, furniture, travel), share a common cap of €672 a year, increased for your spouse and each child. Theft, fire, glass breakage and comprehensive car insurance aren't included, and neither is your home loan.

Little trap: the ACD automatically grants you a flat-rate allowance of €480 for special expenses. A payment only gains you something above that allowance.

Donations: at least €120 in the year

Your donations to approved organisations are deductible if they add up to at least €120 over the year, up to 20% of your total net income and €1,000,000. Anything above carries over to the next two years. Approved organisations are on the lists published by the ACD. Cross-border worker: only through the tax return, with assimilation.

Childcare and household help

You have a child under 14 (on 1 January) looked after in a crèche or an approved facility, or you employ declared household help? An allowance of up to €5,400 a year (€450 a month) is possible, based on your actual costs. Keep the year's invoices: you'll need them for the adjustment or the tax return.

Your tax withholding card, to check before January

You got married, had a child, moved far from work? Your tax withholding card (fiche de retenue), the one your employer uses to calculate the tax taken each month, doesn't always keep up right away.

• If you live in Luxembourg, after a registered marriage or birth, the ACD updates the card by itself, in about 30 working days. Otherwise, form 164 R lets you correct it, with supporting documents.
• Entries on the card (travel expenses, for example) are valid for one year: remember to renew them.
• If your travel expenses went up during the year (€99 per distance unit beyond 4, €2,574 a year at most), the increase counts from the month of the change. The annual tax adjustment lets you correct the year.

The card only changes the tax taken each month, not your final tax: the whole year is settled anyway through the adjustment or the tax return. More details in our guide to the tax withholding card.