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The general rule in most countries is that the country in which income is sourced has the first right to tax that income.

Earnings are sourced in the country or countries in which an employee physically performs their employment duties, so the place where an employee works has taxing rights as well as the country of residence or citizenship.

A Luxembourg resident is generally taxable on all their worldwide income, including their earnings from foreign sources.

Luxembourg allows relief for double taxation through the following ways:

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   •ÌýÌýÌýÌý by exemption of foreign income through the application of double tax treaty relief

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   •ÌýÌýÌýÌý by granting a foreign tax credit for foreign tax suffered, or

Note that exemption will generally take precedence over credit

Foreign tax credit

The foreign individual income taxes paid on that income that is subject to tax in another country may be credited against the Luxembourg tax liability.

This is subject to the general principles that:

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   •ÌýÌýÌýÌý the foreign tax must be a similar individual income tax to the Luxembourg tax, and

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