Reduce your taxes
Certain life insurance premiums are tax-deductible allowing you to pay less income tax in Luxembourg.
HOW TO OPTIMISE YOUR TAX?
Pay less tax by taking out insurance products whose premiums are deductible on your tax return.
Premiums paid for your insurance policies
Article 109 paragraph 1, 1a) L.I.R. sets a maximum deductible limit of €672 per member of the household, including children, for special expenses. Article 111 L.I.R. clarifies which life insurance policies fall within the scope of this tax deductibility.
Insurance premiums paid on the following policies are therefore deductible:
- OptiSave+: the savings and provident solution that can be tailored to your needs;
- Periodic premiums under the outstanding balance insurance (ASRD) policy: the solution for insuring your home loan.
Maximum amounts deductible for special expenses:
| Family situation | No spouse | With spouse* |
| Taxpayer | 672€ | 1.344€ |
| Taxpayer + 1 child | 1,344€ | 2,016€ |
| Taxpayer + 2 children | 2,016€ | 2,688€ |
| Taxpayer + 3 children | 2,688€ | 3,360€ |
| Per additional child | +672€ | +672€ |
* subject to collective taxation.
Premiums paid for your provident and pension policies
It’s never too early to build up the additional capital that will ensure a good standard of living in retirement. From the start of your working life, savings insurance solutions allow you to save at your own pace and benefit from immediate tax advantages.
As part of an OptiPension+ policy or a My Pension+ policy, the premiums paid are deductible from taxable income under article 111a LIR.
The maximum deductible amount is €3,200 per person, provided that your policy is for at least 10 years and that its term is between the insured person’s 60th and 75th birthday.
Single premium for Outstanding Balance Insurance (ASRD)
If you pay a single premium for your ASRD policy to cover a loan to finance your own home, the deductible limits will be increased. These increases depend on the family situation, the age of the insured party and the number of children in the household.
| Family situation | Up to 30 years | From 31 to 49 years | 50 years and over |
| Taxpayer | 6,000€ | 480€/year | 15,600€ |
| Taxpayer + 1 child | 7,200€ | 576€/year | 18,720€ |
| Taxpayer + 2 children | 8,400€ | 872€/year | 21,840€ |
| Taxpayer + 3 children | 9,600€ | 768€/year | 24,960€ |