Young professional in Luxembourg: Why file a tax return even when it isn’t mandatory?

Starting a career in Luxembourg often goes hand in hand with a first well-paid job, financial independence, and new life plans. However, one question frequently comes up among young professionals: “Do I really need to file a tax return if it isn’t mandatory?” The answer is simple: in most cases, yes — because it often is financially beneficial. Find out why in this article.

Luxembourg continues to attract many young graduates and junior professionals, particularly in finance, IT, legal roles, and support functions. According to recent job market studies*, annual gross salaries for junior profiles generally range as follows:

between EUR 30.000 and EUR 40.000 in administrative or commercial roles,
between EUR 40.000 and EUR 55.000 in finance, IT, or consulting,
up to EUR 60.000 for certain technical or legal profiles, even in the very first years of a career.

These salaries are often complemented by additional benefits (bonuses, insurance, supplementary pension schemes), meaning that income tax is deducted directly at source. As a result, many young professionals mistakenly believe that “there is nothing left to do” from a tax perspective.

*Source : The job market for young professionals in Luxembourg in 2025

In Luxembourg, not everyone is required to file a tax return. For a single employee with no additional income and a moderate salary, filing a tax return may be optional. However, ”optional“ does not mean “unnecessary”.

Even without a legal obligation, it is possible to submit a voluntary tax return, particularly in order to:

correct an overpayment of withholding tax,
declare tax-deductible expenses,
obtain a refund that can sometimes be significant.

In Luxembourg, your employer withholds income tax each month based on a projection of your annual income. The calculation assumes that you have earned a salary over all twelve months of the year. However, if you started work partway through the year—after graduating in June, for example—the withholding does not reflect what you actually earned.

As a result, you have likely paid more tax than necessary.

In addition, the following factors often come into play:

your personal situation is not yet fully taken into account,
certain deductions are not automatically included in your tax card.

By filing a tax return, you allow the Luxembourg Inland Revenue (Administration des Contributions Directes) to recalculate your actual tax liability—often to your benefit.

Even at the beginning of your career, you are likely to have already incurred expenses that can be tax-efficient, including in particular:

insurance (civil liability, supplementary health insurance, life insurance),
retirement savings or private pension scheme,
loan interest (car loans, consumer credit),
actual work-related expenses, and more.

The first years of your career are ideal for:

developing good financial habits,
optimising your taxes without unnecessary complexity,
preparing for the future while reducing your tax burden today.

This is one of the most powerful tax levers available—even for young professionals.

Up to EUR 4.500 per year per person is deductible as of 2026.
The deduction is independent of other insurance policies.
Capital becomes available from the age of 60, and no later than 75, with favourable taxation upon payout.

It is a particularly relevant choice at the very beginning of one’s career: the earlier you start, the greater the long-term impact.

Two good reasons to think about retirement from the start of your working life!

Completing studies: check. Finding the first job: check. Having a head full of plans reminds you that you have your whole life ahead of you to achieve them, because you’re young. However, this is precisely why we need to talk to you about your retirement. Retirement may still seem a long way away to you, but read this article to understand why now is the right time to think about it!

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Deductible up to EUR 672 per household member.
Often already taken out without realising that they are tax-efficient.
Also include certain outstanding balance insurance or death insurance policies.

Car loans, personal loans, and other consumer credits.
Deductible within the EUR 672 per household member cap, shared with the insurance policies mentioned above.
If your insurance premiums already fully use this ceiling, loan interest can no longer be added.

Applicable if you already own your primary residence.
Subject to a separate tax regime from insurance policies and consumer credits, with its own deduction limits.
Deduction limits depend on the date the property was made available.

The standard lump-sum deduction is applied automatically. However, the following expenses:

professional training specifically required by your employer,
certain job-specific equipment,
a home office (for teachers),

may be deducted if they exceed the flat-rate amount.

Good news! Filing your tax return has never been easier. Today, young professionals can benefit from clear, user-friendly, and secure digital tools that make the process straightforward and secure.

complete your tax return online using an interface that guides you step by step,
simulate your tax return free of charge and find out whether you are entitled to a refund,
receive support at any time from tax experts via chat or e-mail,
benefit from the Opti Score, which shows you how to further optimise your tax return,
have your tax assessment notice reviewed (as it may also contain errors).

Learn more about taxx.lu

And as a bonus, Spuerkeess customers benefit from a preferential rate with taxx.lu for the preparation of their tax return.

Even when it is not mandatory, filing a tax return is often a financial opportunity for young professionals in Luxembourg. It allows you to:

get money back,
optimise your tax situation,
prepare for the future right from the start of your career.

So, the real question is not “Am I required to?” but rather: “How much could I get back if I do?”

Let yourself be guided with ease and start your simulation today.

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