Declaration Errors That Cause You to Overpay Taxes
Each year, when analysing tax returns of cross-border workers, the same overlooked issues repeatedly appear:
Actual professional expenses
The standard 10% deduction applies by default, but it is not always the most advantageous option. In some cases, claiming actual expenses is more beneficial: commuting costs, meals, and remote work days. A cross-border worker living 30 km from their workplace can therefore gain several thousand euros in additional deductions.
A Luxembourg bank account
Any account held in Luxembourg must be declared using form 3916, whether or not it generates income. Failure to declare it exposes the taxpayer to a €1,500 fine per undeclared account.
Box 8SH
Unknown to many cross-border workers, this box allows social contributions on certain investment income to be reduced to 7.5% instead of 17.2%. An error or omission results in significantly higher taxation.
Tax treatment of Luxembourg income
Since the new tax treaty, a tax credit applies to gross income after deduction of social security contributions. Any mistake directly affects the amount of French tax due.
Unclaimed tax credits
Certain boxes are systematically left blank even though they grant tax reductions: employing a domestic worker, childcare expenses, charitable donations. Failing to complete these sections means leaving money unclaimed with the tax authorities.
Alimony payments
Maintenance payments may be deductible under certain conditions: the recipient must be in financial need, payments must be properly documented, and the amount must remain proportionate to the taxpayer’s income.
Schooling of children
Tax reductions exist depending on the child’s level of education:
- Middle school: €61
- High school: €153
- Higher education: €183
The child must be dependent as of 31 December of the relevant year.
Each of these points deserves careful review before submitting a tax return.
https://impotsdirects.public.lu/fr/support/foire-aux-questions/faq-fr/residents.html