Cross-border workers: how Class U affects frontaliers

The short answer

Non-residents with Luxembourg employment income are taxed on Class U by default from 2028. Single frontaliers move there automatically and, like resident singles, most pay less. Married frontaliers can keep joint taxation on Tarif T only if they were married before 2028 and meet the assimilation conditions every year. Our calculator is built for residents, so use it as a rough guide only.

Single frontaliers

Under the voted text, non-residents with taxable professional income in Luxembourg are taxed on the Class U scale (amended article 157bis). Its 0% band runs to €26,650, compared with €13,230 on today's base scale used for class 1, so a single cross-border worker typically pays less Luxembourg tax from 2028. Single parents who apply for assimilation can also claim the single-parent tax credit, as they can today.

Married frontaliers: Tarif T through assimilation

Today a married non-resident only gets class 2 by being "assimilated" to a resident. The reform keeps that logic. Couples married before 1 January 2028, where one or both are non-resident, are taxed jointly on Tarif T during the transition if the assimilation conditions are met, unless they opt for individual taxation. The conditions in the voted text are that at least 90% of the taxpayer's total (Luxembourg and foreign) income is taxable in Luxembourg, or that net income not taxed in Luxembourg is below €13,000.

The trap: during the transition, not applying for assimilation in time, or not meeting the conditions, in any one year ends joint taxation for good. The text provides one exception: a couple can be let off once if the conditions fail only because of foreign income that is not professional income. For the start of the transition, non-residents are treated as having applied for assimilation in 2027. The assimilation request is made in the tax return, due by 31 December of the following year.

Mixed couples: one resident, one non-resident

If one spouse has lived in Luxembourg since the start of 2028 and the other lives abroad, they can be taxed jointly on Tarif T on joint request, provided they married before 2028 and the resident spouse earns at least 90% of the household's professional income in Luxembourg. Without that joint request, or if the condition fails, the resident is taxed individually and cannot return to joint taxation.

France, Germany and Belgium

France and Germany: the Luxembourg rules above apply in the same way. A useful detail from the current assimilation rules: for the 90% test, up to 50 working days spent outside Luxembourg are still counted as Luxembourg income.

Belgium: under today's rules, Belgian residents can also be assimilated if 50% of the household's professional income is taxable in Luxembourg. The voted text of Bill 8676 only spells out the 90% and €13,000 tests for access to joint taxation during the transition. Whether the Belgian 50% route still leads to Tarif T is not clear from what we have read; ask the ACD or an adviser before relying on it.

In every case, Bill 8676 changes Luxembourg's income tax law. It does not by itself change how France, Germany or Belgium tax you at home or how double taxation is relieved there.

Moving into or out of Luxembourg

The text also protects couples who were jointly taxed and then move across the border after 2028: if they were taxed jointly in the year of the move, they can continue on Tarif T on the other side, under the resident or the non-resident rules. Moves are complex, so get advice for your exact case.

What to do now

• Check whether you meet the 90% or €13,000 test, and keep proof of your foreign income.
• File your tax return with the assimilation request every year if you want to keep Tarif T.
• Compare Tarif T with Class U before 30 November 2027 if you might switch; see our couples guide.