Luxembourg’s parliament has approved Bill 8676, which ends joint taxation by replacing the country’s three income tax classes with a single tax class, with most provisions applying from the 2028 tax year.
Luxembourg’s Parliament adopted Bill 8676 on 28 October 2026, overhauling the personal income tax system so that marital status no longer determines how a person is taxed.
Single tax class replaces three
The reform scraps tax classes 1, 1a and 2 in favour of a single tax class “U”. People currently in class 1 or 1a will move to it automatically, as will couples who marry or enter a registered civil partnership after the reform takes effect.
According to the accompanying summary, the tax-free band rises to EUR 26,650, the number of brackets falls from 23 to 11, and the top marginal rate of 42% applies to income above EUR 234,800.
Transition for existing couples
Couples already married or in a registered civil partnership before the change may keep joint taxation for up to 25 years. They may move to class U at any point in that period, but the decision is final.
Family measures
Families with children under three will receive a new allowance of EUR 5,400 per child. The single-parent tax credit increases from EUR 3,504 to EUR 4,008.
Deductions and indexation
Several deduction ceilings are also raised, notably for insurance premiums, loan interest and home savings plans. The allowance for childcare and home help costs increases to EUR 6,000.
The tax scale will additionally be adjusted for inflation, with sources differing on the trigger: one report says after each series of four index tranches, while the bill summary refers to every three salary indexation steps.
Most of the provisions will apply from the 2028 tax year.
