Thanks to the continuous efforts of the OGBL

As of January 1, 2024, all employees and retirees will benefit from a new tax relief, following the one already introduced in 2023 in form of a tax credit. These measures are the result of the OGBL’s constant efforts to increase the financial strength of households and individuals, which have led to a change in Luxembourg’s tax policy since 2023.

In 2023, for the first time, employees and retirees received a tax credit (crédit d’impôt conjoncture – CIC) equivalent to the impact of two index tranches on their personal taxation. This credit was applied retroactively as of January 1, 2023. As of January 1, 2024, the tax scale has been adjusted by 10.38%, equivalent to the impact of four index tranches on personal taxation.

This latest measure will permanently reduce the tax burden on households and individuals.

The CIC and the adjustment of the tax scale are part of the package of measures included in the latest tripartite agreement signed by the OGBL in March 2023.

Tripartite agreement boosts purchasing power

As a reminder, in September 2022, after months of lobbying alone, the OGBL succeeded in obtaining a new tripartite agreement that allowed the return to normal operation of the index and the introduction of anti-inflationary measures, particularly with regard to energy prices, as well as the aforementioned tax measures. It should be recalled that a few months earlier, only the OGBL had refused to sign the tripartite agreement, which seriously jeopardized the index, even though it was approved by the other unions!

A first step towards greater tax justice

The new government, under pressure from the OGBL to curb the phenomenon of “cold progression”, which is a real but disguised tax increase, finally decided to extend the number of brackets initially provided for in the tripartite agreement from 2023 to 4 brackets from January 1, 2024. This was in response to the OGBL’s demand for greater tax relief for employees and retirees.

However, the OGBL has not forgotten that since 2017 only half of the tax surcharge has been compensated (4 out of 8 tranches) and that an automatic adjustment of the tax scale, as demanded by the OGBL, is still not provided for. Such an automatic adjustment is necessary to put a definitive end to this theft of the gross index!