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1.1ÌýÌýÌýÌý Introduction: overview of the domestic payroll system

The Grand Duchy of Luxembourg is a constitutional monarchy. It is a European Union (EU) member state and has many workers from other states, including cross-border workers. Luxembourg is a rich nation and is a popular location for international business due to its excellent infrastructure, economic stability and central European location.

Although Luxembourgish (³¢Ã«³Ù³ú±ð²ú³Ü±ð°ù²µ±ð²õ³¦³ó) is the Luxembourgers' mother tongue, most written business is in French, and German is taught in school as the first language.

Tax administration

The Luxembourg Administration des Contributions Directes (ACD) is the tax collection body for direct taxes, including withholding of income tax at source on salaries. The ACD is divided into four departments:

1. Ìý

   •ÌýÌýÌýÌý direction – sixteen different divisions, including the general direction, litigation, exchange of information, etc

2. Ìý

   •ÌýÌýÌýÌý taxation department – sets the tax rates for individuals and employer withholding

3. Ìý

   •ÌýÌýÌýÌý revenue department – collects tax

4. Ìý

   •ÌýÌýÌýÌý audit department – checks compliance by employers and individual taxpayers

The Retenue d'impôt sur les