Tax reporting in Luxembourg Tax reporting in Luxembourg

Tax reporting in Luxembourg
08 Jan 2018

The Global Payroll Association’s director of
education and research, Jeanette Hibbert, examines
tax reporting in Luxembourg

I am due to take on a Luxembourg payroll for my company and am building a set of compliance checks as we will be using a third party to process the payroll. What do I need to ensure they are doing for income tax returns?

Periodically you must submit and prepare a withholding tax declaration to the relevant tax office, which is determined by the geographical location of the registered office of your business. The form to be used is the 950FD (the frequency is outlined in this table).

Frequency of declaration and payment

Sum of the deductions for

the month

Frequency of declaration

and payment

 

Declaration and payment to

be carried out for the…

From EUR 750

monthly

10th of the following month

From EUR 75 to EUR 750

 

quarterly

 

10th of the month following the

quarter

Less than EUR 75

 

annually

 

10th of the month following the

tax year

Even if no tax was deducted in that period, you must submit the declaration stating that no tax was deducted. From a compliance perspective, it would be reasonable for you to ask for copies of the relevant 950FD and confirmation of payments from your third party as your business is still accountable for ensuring compliance, even if you use an authorised third party representative to complete the filing and payments for you.

You can download a blank form and find tax offices for filing and payment.

Since 2015, you must file an annual return to the Luxembourg tax authority electronically each year by the 1 March following the end of the tax year. These returns must include all payments and pension contributions paid to your employees during the tax year. The Submission of Salary and Pension Accounts Statements guide gives detailed advice.

You must have a unique reference number per employer and tax year and they must be sent via MyGuichet, or by using the wizard as per the instructions in the guide listed above (not recommended for a large employer as you enter per employee).

Filing can be completed by an authorised representative, such as an outsourcing partner.

In order to ensure your third party has filed appropriately within the deadline, you could ask for a screen copy of the page with the status of the submission on MyGuichet, or the homepage, which should list the history of creating and amendments to submissions.

The Luxembourg Inland Revenue (LIR) will carry out several automated checks on the file and may reject it if they find errors. Where possible corrections should be made via MyGuichet. It might be a useful key performance indicator for you to see how many times the submitted files are updated and amended.

Finally, when an employee leaves, an electronic statement must be filed with all pay and pension contributions on, as soon as the employment relationship ends, via MyGuichet.

There are penalties for late filing and payments. There are also reporting and payment requirements for Centre commun de a sécurité sociale CCSS (Joint Social Security Centre).

“It might be a useful key performance indicator for you to see how many times
the submitted files are updated and amended”

The Global Payroll Association’s director of
education and research, Jeanette Hibbert, examines
tax reporting in Luxembourg

I am due to take on a Luxembourg payroll for my company and am building a set of compliance checks as we will be using a third party to process the payroll. What do I need to ensure they are doing for income tax returns?

Periodically you must submit and prepare a withholding tax declaration to the relevant tax office, which is determined by the geographical location of the registered office of your business. The form to be used is the 950FD (the frequency is outlined in this table).

Frequency of declaration and payment

Sum of the deductions for

the month

Frequency of declaration

and payment

 

Declaration and payment to

be carried out for the…

From EUR 750

monthly

10th of the following month

From EUR 75 to EUR 750

 

quarterly

 

10th of the month following the

quarter

Less than EUR 75

 

annually

 

10th of the month following the

tax year

Even if no tax was deducted in that period, you must submit the declaration stating that no tax was deducted. From a compliance perspective, it would be reasonable for you to ask for copies of the relevant 950FD and confirmation of payments from your third party as your business is still accountable for ensuring compliance, even if you use an authorised third party representative to complete the filing and payments for you.

You can download a blank form and find tax offices for filing and payment.

Since 2015, you must file an annual return to the Luxembourg tax authority electronically each year by the 1 March following the end of the tax year. These returns must include all payments and pension contributions paid to your employees during the tax year. The Submission of Salary and Pension Accounts Statements guide gives detailed advice.

You must have a unique reference number per employer and tax year and they must be sent via MyGuichet, or by using the wizard as per the instructions in the guide listed above (not recommended for a large employer as you enter per employee).

Filing can be completed by an authorised representative, such as an outsourcing partner.

In order to ensure your third party has filed appropriately within the deadline, you could ask for a screen copy of the page with the status of the submission on MyGuichet, or the homepage, which should list the history of creating and amendments to submissions.

The Luxembourg Inland Revenue (LIR) will carry out several automated checks on the file and may reject it if they find errors. Where possible corrections should be made via MyGuichet. It might be a useful key performance indicator for you to see how many times the submitted files are updated and amended.

Finally, when an employee leaves, an electronic statement must be filed with all pay and pension contributions on, as soon as the employment relationship ends, via MyGuichet.

There are penalties for late filing and payments. There are also reporting and payment requirements for Centre commun de a sécurité sociale CCSS (Joint Social Security Centre).

“It might be a useful key performance indicator for you to see how many times
the submitted files are updated and amended”

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