On Wednesday 28 October 2026, Luxembourg's Ministry of Finance announced that the Chamber of Deputies had adopted Bill No. 8676 introducing a single tax class from 1 January 2028.
According to the ministry, the reform will gradually replace the personal income tax system, which is largely based on marital status, with a model reflecting today's societal realities and the diversity of family structures.
The ministry stated that the single tax class offers greater tax fairness and greater predictability for citizens in the face of life's uncertainties, and therefore greater financial stability.
It once again increases purchasing power through tax relief for the vast majority of taxpayers, while the others will benefit from a 25-year transitional period.
The reform also provides renewed support for single-parent households, notably through a further increase in the single-parent tax credit from €3,504 to €4,008, following an initial increase of approximately €1,000 in 2025.
An early childhood tax allowance of €5,400 per year for parents of young children will be added to the increase in family allowances applicable from 2027 and will complement improved childcare support through the enhanced childcare service voucher scheme (chèque-service accueil).
The reform also provides greater support for people who reduce their working hours, particularly to care for people in need.
Finally, the reform provides for a mechanism for automatic indexation of the tax scale after four index-linked adjustments, in addition to a general increase in tax deduction ceilings.
Luxembourg's Minister of Finance, Gilles Roth, emphasised: "The vote by the Chamber of Deputies marks a decisive step in the implementation of the single tax class and paves the way for a more modern, fairer tax system that is better adapted to the realities of citizens' everyday lives. This reform takes into account the evolution of our society and the diversity of family situations. Citizens will continue to benefit from tax relief."
He added: "The reform reflects an essential conviction: the State must serve citizens, not the other way around. By strengthening the fairness and neutrality of our tax system, the single tax class meets taxpayers' expectations and opens up new prospects for the future, particularly for younger generations."
From 2028, new taxpayers and those belonging to tax classes 1 and 1a will be taxed under the new tax class. Taxpayers who were jointly taxed before 1 January 2028 will be able to continue benefiting from the rates of the former tax class 2 for 25 years.
