22. Tax optimisation

What is tax optimisation?

Tax optimisation consists of using all legal provisions under Luxembourg law to reduce the amount of tax you have to pay or increase the refund you receive.

In practice, this means you can deduct certain expenses from your taxable income (such as insurance, savings plans, or loan interest). The goal is not to avoid taxes, but to adjust your tax situation considering your family, investments, and everyday expenses, so that you pay only what is necessary and no more.

Main categories of tax deductions

Insurance

Examples of deductible insurance:

• Life insurance
• Car insurance (liability and protected driver only)
• Home insurance (liability only)
• Health insurance supplement (DKV, CMCM…)
• Mortgage repayment insurance

Limit:

• 672€ per member of the tax household per year.

Retirement savings plans

Ideal for preparing your retirement while reducing your taxes.

Limit:

• 3.200€ per year per taxpayer

Conditions:

• Minimum contract duration of 10 years
• Capital available from age 60

Home Savings Plans

A home savings plan is a solution to finance, repay, or renovate your primary residence.

Limit:

• 1.344€ per person (ages 18–40)
• 672€ per person (over 40)

Condition:

• Funds must be used to finance, repay, or renovate the primary residence.

A partner for your tax solutions

To fully benefit from these advantages, it is often necessary to subscribe to certain financial products or insurance (life insurance, home savings, retirement savings, mortgage repayment insurance, etc.).

We work in partnership with LALUX, a recognized player in the Luxembourg market, and we have a dedicated branch. This allows you to easily open all these contracts directly with us, simply and efficiently, while benefiting from both tax advice and a solution tailored to your needs.

No need to travel: you can manage all your subscriptions and procedures directly online. Our team supports you at every step to make the process simple, fast, and secure.

Understanding the impact of deductions on your taxes

The marginal tax rate corresponds to the percentage of tax applied to your last euro of income. The higher your income, the higher the marginal rate.

Concrete example

• Annual income: 80.000€
• Marginal rate: 42%
• Retirement savings deduction: 3.200€

The tax savings are calculated as follows:

3.200 × 42% = 1.344€

This means you reduce your tax by 1.344€ thanks to this single deduction.