MEPs adopted the Entlaaschtungs-Pak on Wednesday, which should lower your taxes. At the end of 2023, the government had adapted the income tax tax scale of 10.3% (four index brackets) for the 2024 tax year. It will be adapted by 2.5 additional index brackets from 2025. This represents a tax cut of 6.8%.
The tax treatment of class 1a will also be reduced: the amounts exempt from the single-parent tax credit and the maximum allowance for extraordinary expenses for children not part of the taxpayer’s household will be increased. The tax burden for people in class 1, paid at the minimum social wage, will be eliminated by overcompensation from January 1 so that the tax burden remains zero even with the index planned for 2025.
An overtime tax credit will compensate for any loss of income for employees not living in Luxembourg who would be taxed by their country of residence on gross overtime pay. Young people under 30, with a first permanent employment contract in Luxembourg, will be able to benefit from a tax reduction up to a certain level of income provided they remain with the same employer with a maximum limit of five years for the granting of this young employee bonus.
World
