Key takeaways
On 9 June 2026, the Luxembourg Government submitted eleven amendments to draft law No. 8676 introducing the Single Tax Class and individual taxation as the default personal income tax regime from 2028 onwards. The amendments follow the Council of State’s opinion of 5 May 2026 and primarily aim to address the constitutional and technical concerns raised during the legislative process.
While the overall structure remains unchanged, the amendments provide important clarifications regarding the operation of the transitional collective taxation regime (Tarif T), the consequences of opting for individual taxation, the treatment of internationally mobile taxpayers, and several technical aspects of the future system.
Clarification of the transitional regime and the election for individual taxation
The most significant amendments concern taxpayers who will remain eligible for collective taxation after the introduction of the Single Tax Class.
The Government has clarified the rules applicable to married couples and registered partners benefiting from the transitional regime available to relationships existing before 1 January 2028. In particular, the amended draft law simplifies the mechanism through which certain taxpayers may leave collective taxation.
For taxpayers who benefit from collective taxation only upon request, such as registered partners and certain cross-border couples, the absence of a request for collective taxation will automatically result in individual taxation. Importantly, this choice remains irrevocable. Once taxpayers leave the transitional collective taxation regime, they may no longer return to it.
The amendments therefore reinforce one of the key features of the reform: taxpayers will need to carefully assess the long-term implications of any decision to move to individual taxation.
Greater legal certainty for cross-border transitional situations
The amendments also provide additional guidance for situations involving changes of residence between Luxembourg and another jurisdiction.
The revised provisions confirm that taxpayers who qualified for the transitional regime before 2028 will not automatically lose access to collective taxation merely because they move abroad and subsequently return to Luxembourg. This clarification is particularly relevant for internationally mobile households and cross-border taxpayers whose residence status may evolve during the transition period.
In addition, the Government has introduced a targeted transitional measure to protect taxpayers affected by divorce or the death of a spouse shortly after the reform enters into force. Without this amendment, certain taxpayers who had elected individual taxation before the start of the new regime could have been excluded from the favourable five-year transitional protection available to divorced and widowed taxpayers. The amended draft law addresses this issue and ensures that access to the transitional regime is preserved in these circumstances.
Technical adjustments to the future tax framework
The amendment package also introduces several technical refinements intended to improve the operation of the future tax system.
Most notably, the Government replaced the original mechanism for adjusting tax brackets following future wage indexations. The amended draft law introduces an automatic adjustment mechanism, thereby addressing concerns raised by the Council of State and providing taxpayers with greater predictability regarding future tax bracket developments.
The amendments further refine a number of provisions relating to deductions and tax benefits. Certain deductions remain linked to the transitional collective taxation regime, while additional clarifications have been introduced regarding the allocation of child-related tax benefits and the deductibility of voluntary pension contributions paid on behalf of a spouse or partner.
Finally, several technical corrections have been made to provisions applicable to non-resident taxpayers in order to improve consistency and eliminate uncertainties.
Next steps
The amended draft law will now continue its legislative process before the Chamber of Deputies. Although further amendments remain possible, the Government’s proposals confirm the overall direction of the reform while providing greater legal certainty regarding its implementation.
For taxpayers eligible for the transitional regime, the amendments highlight the importance of carefully considering any future election for individual taxation, particularly in light of its irrevocable nature.
For a more detailed overview of the objectives, structure, and practical implications of draft law No. 8676, please refer to our January 2026 newsletter dedicated on the introduction of the Single Tax Class.
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