Covid-19 – Measures from the Luxembourg tax authorities to support taxpayers published on March 17, 2020

As part of the implementation of the measures decided by the Luxembourg Government to protect health and to limit the spread of the Coronavirus, a series of measures intended to guarantee the continuity of the Luxembourg economy have been put in place.

Taxpayers (i.e. corporate entities and individuals) who realize a taxable profit (i.e. commercial profit, agricultural and forestry profit or a profit from the exercise of a liberal profession) and who are experiencing cashflow issues due to the Covid-19 pandemic may request:

• a cancellation of their quarterly advances for Corporate Income Tax and Municipal Business Tax for the 1st and 2nd quarter of 2020 only.
• an extension of the deadline for the payment of Corporate Income Tax, Municipal Business Tax and Net Wealth Tax. No interest for late payment will be charged by the tax authorities in case the extension requested does not exceed 4 months (as from the date of the normal deadline).

Requests for the cancellation of advances and for the extension of payment dates will automatically be accepted by the tax administration.

The appropriate forms and the list of relevant tax offices are available on the tax administration’s website.

The request must be motivated.

In addition, the deadline for submitting tax returns has been extended to June 30, 2020. This measure is applicable for both corporate entities and individuals, as well as for taxpayers (individuals) wishing to request, modify or revoke their choice of individual taxation.

Frequently Asked Questions (FAQ)

Q: How to submit the request to the tax office?

A: By completing the appropriate application form, signing it and sending it by post or email to the appropriate tax office.

Q: Can an Employer request a delay for the payment of withholding tax on salaries paid to the Employees?

A: No, the withholding tax on salaries is excluded from these measures, considering that it is the deduction of the Employee that the Employer must continue to the tax authorities.

Q: Can a delay for the payment of taxes that are due before March 1, 2020 be granted based on these measures?

A: No, only taxes which are due after February 29, 2020 are concerned.

Q: Can a company request a cancellation of the Net Wealth Tax advances?

A: No, only advances for Income Tax (for individuals and corporations) and Municipal Business Tax can be cancelled.

Q: Can a taxpayer ask for the cancellation of the two first quarterly advances of 2020?

A: Yes, provided that the appropriate boxes (the 1st quarter 2020 and 2nd quarter 2020) are checked in the form.

Q: If the taxpayer wishes to reduce the quarterly advances to a certain amount, without cancelling them, can he make a corresponding request?

A: Yes, the taxpayer should contact the competent tax office by letter, motivate the request and propose the amount he would like to pay.

We can assist you with the above matters. Should you have further questions please contact us.