Majority of Tax Declarations in Luxembourg Still Filed on Paper, Despite Digital Assistant

Finance Minister Gilles Roth, and the director of the Luxembourg tax office (Administration des Contributions Directes), Jean-Paul Olinger, on Thursday presented plans to simplify and digitalise tax filing procedures.

The government wants to make life easier for citizens and businesses by reducing their tax burden and easing the administrative process, Roth said.

Fewer than one in ten people currently use the MyGuichet digital assistance to file their tax return electronically, with the tax office working on improving the tool to achieve its aims of 85% of declarations filed online.

That is a far cry from the 77% of declarations still filed on paper in 2023. Just over 13% of taxpayers used a PDF available on the MyGuichet site, while 9.6% of taxpayers used the digital assistant to file their taxes. That represented an increase of 3.7 percentage points on the 5.9% who used the service in 2021.

That is precisely the same percentage point fall in paper filings over the same period, while the share of taxpayers using the PDF system remained constant between 2021 and 2023.

“We are in the process of undertaking a major transformation to simplify our procedures, make things easier for taxpayers and facilitate their interaction with our services. We are going to speed up the digitisation process so that we can deal with simple cases more quickly and complex cases more effectively,” said Olinger.

Olinger joined the tax office from the UEL business lobby group last year after his predecessor Pascale Toussing was shown the door at the end of 2023, reportedly over her failure to modernise the administration that rakes in half of all tax revenues.

In November last year the tax office launched a Contact Centre, which it says is designed to ensure that taxpayers’ queries are dealt with quickly and followed up efficiently. Full deployment of the centre will be completed by mid-2025.

Simple tax return to launch March

The launch of the so-called simple tax return for individuals is scheduled for March. Featuring a tax return pre-filled by the administration in full compliance with data protection rules, the service is an opt-in that is initially aimed at 20,000 households that have only salary and pension income (and no deductions other than the flat-rate minimum). It will gradually be extended with the aim of covering 100,000 tax returns by 2028.

On 1 January the government introduced a series of tax measures that Roth said would result in significant tax relief. This included an adjustment of tax brackets by 2.5 indexations on top of an adjustment of four indexations which took effect in 2024.

Tax payers can compare their current tax situation with that of 2024 by using a tax calculator on the Ministry of Finance website, which can also be accessed via www.manner-steieren.lu.