Luxembourg Income Tax Rates for 2025

Luxembourg Income Tax Brackets

Luxembourg has a bracketed income tax system with seventeen income tax brackets, ranging from a low of 0.00% for those earning under €11,265 to a high of 38.00% for those earning more then €39,885 a year.

How does the Luxembourg Income Tax compare to the rest of the world?

Out of the thirty four countries tracked, fifteen have a higher maximum income tax rate then Luxembourg. Countries with similar tax brackets include Japan with a maximum tax bracket of 40.00%, Chile with a maximum tax bracket of 40.00% and France with a maximum tax bracket of 40.00%. Keep in mind that our ranking measures only nationwide income taxes, and does not account for local income taxes at state, province, or municipal levels.

Maximum Income Tax	Income Tax Allowance	World Tax Rank
38.00%	€1,416 ($0 USD)	16th of 34

What is the Luxembourg Income Tax?

Luxembourg's personal income tax is a bracketed income tax that must be paid yearly by all citizens to the government of Luxembourg. Failure to pay, or underpayment of, the Luxembourg income tax can result in high fees, fines, or jail time.

In addition to Luxembourg's income tax, other taxes may apply to wages or profits earned, including social services, medical care, and capital gains taxes.

Luxembourg Income Tax Allowance

Luxembourg provides most taxpayers with an income tax allowance of €1,416, which can be kept as a tax-free personal allowance. Luxembourg's tax credit is a basic (fixed) allowance available to all (single) taxpayers without dependents. an additional 300€ nonwastable tax credit is available.

A tax credit is a fixed amount of money that may be kept by taxpayers without paying any income taxes. Generally, a tax credit is subtracted from your gross income before your taxable income is calculated.