A three-stage reform
Luxembourg has launched a progressive tax reform spanning 2026 to 2028. Some measures are already in force, others are part of a bill tabled in Parliament. Here is what changes, year by year.
Important: the 2027 and 2028 measures come from a bill expected to be voted by the end of 2026. Amounts and dates may still be adjusted.
2026: already in force
The budget law of 19 December 2025 brought changes applicable since 1 January 2026:
| Measure | Detail |
|---|---|
| CO2 tax credit (CI-CO2) | raised from EUR 192 to EUR 216/year (degressive between EUR 40,000 and 80,000 of annual gross salary) |
| Occasional work | hourly cap raised from EUR 16 to EUR 18 |
| Withholding scale | unchanged compared to 2025 |
2027: the family package
Presented in January 2026 under the name “Mateneen. Fir all Famill. Fir all Kand.”, this part targets households with children from January 2027:
| Measure | Detail |
|---|---|
| Family allowances | +EUR 45 per child under 12, +EUR 60 above |
| Single-parent tax credit (CIM) | raised to EUR 4,008/year |
| Young children | new tax allowance for parents of children under 3 |
2028: the single tax class
This is the paradigm shift: from 1 January 2028, a single tax class (the “U class”) will replace classes 1 and 1a. The tax-free bracket would be raised to EUR 26,650 per year — roughly double the current level.
For married or partnered couples currently in class 2, a 25-year transition period is planned: those taxed collectively before 2028 can keep the benefit of the old splitting regime. New taxpayers will fall directly under the single class.
Who benefits? Singles and single parents (current classes 1 and 1a) are the main winners of the single class. For single-earner couples, class 2 splitting was often more advantageous — hence the long transition period.
What it means for your simulation
Our calculator applies the tax brackets and credits currently in force (2026). We will adapt it at each stage of the reform as the laws enter into force. In the meantime, you can compare your situation in class 1, 1a or 2 to anticipate the 2028 switch.
Simulate your 2026 net salary
Calculate your net with the ACD 2026 brackets and compare tax classes in seconds.