Luxembourg tax return: which insurance premiums should be deducted?

My money and my future

Which insurance premiums can you deduct in your tax return?

March 6, 2024

Completing your tax return in Luxembourg can sometimes seem a daunting task. Whether you are a resident taxpayer or a cross-border commuter, there are various tools and guides available to help you. Understanding what can be deducted is essential for an accurate and efficient return. Did you know that a number of insurance premiums are tax deductible?

Which premiums can be deducted in your tax return?

You can deduct all the following insurance premiums in your tax return:

Premiums for third party liability in your private life;
Premiums for third party car liability;
Premiums for life insurance;
Premiums for your outstanding balance insurance, whether periodic or in one single premium;
Your retirement provision insurance.

All these premiums are subject to certain ceilings set according to the type of premium and the composition of your household. You can find all the ceilings in our downloadable leaflet at the bottom of the page.

You can also deduct a whole range of other expenses:

interest charges (personal loans, house loans, etc.)
donations
employment of domestic staff
...

Some examples of tax deductions

Here are a few concrete cases showing how you can best optimise your tax declaration thanks to your insurance premiums.

Married couple with one child

In the case of a married couple, with one child (taxed in class 2), who have:

two cars (€750 of third-party motor car liability);
private life cover taken out as an option in your Home policy (€65);
a ‘Kid's Plan’ life insurance policy for their child (€1,000).

They can deduct all the premiums paid under these policies, namely €1,815, and benefit from a tax gain of €593.

Married couple without children

If we consider a married couple without children (tax class 2) who have :

a vehicle (€400 third-party motor liability) ;
third-party life insurance taken out as an option in their Home policy (€65);
a Life Plan life insurance policy (€1,000);
bought a house for which they took out a mortgage, covered by outstanding balance insurance (€11,000).

They can deduct certain premiums paid under these policies up to a maximum of €1,344[1] and the entire outstanding balance insurance, i.e. €12,344 in insurance premiums, for a tax saving of €3,151.

[1] In the case of a childless couple, the maximum deductible amount for insurance premiums is €1,344 under article 111. In this example, the couple's total income is €1,665, so the total deduction taken into account will be €1,344. See our brochure for the different ceilings.

Single-parent family with one child

For a single-parent family (taxed as class 1A) with:

a car (€400 for third party liability);
civil life liability taken out as an option in the Home policy (€65);
a Kid's Plan life insurance policy (€1,000);
a Pension-Plan pension policy (€1,200).

All the premiums paid under these policies are deductible, namely €2,265 in insurance premiums, resulting in a benefit from tax advantages of €960.

Single

In the case of a single person (taxed as class 1) with:

a car (€400);
private liability cover taken out as an option in their Home policy (€65);
a Pension Plan insurance policy for old age (€3,200).

All these premiums (€3,665) are also deductible and represent a tax gain of €1,544.

Our video tips for completing your tax return

Whether you are a resident or non-resident taxpayer, in this article you will find our video advice on how to deduct all your insurance premiums from your Luxembourg tax return.