Public debate

Petition to abolish tax on bonuses hits threshold

Many of the bonuses awarded in Luxembourg are in the financial sector Photo: Maison Moderne

Many of the bonuses awarded in Luxembourg are in the financial sector Photo: Maison Moderne

A petition seeking to remove taxes on 13th-month salaries and other bonuses has reached the 4,500-signature threshold.

Petition no. 1914, launched by Carmen Da Cruz, has gained enough signatures for a public debate. It states that employees who already pay tax and social security on a 12-month annual salary should not have to pay tax and social security on any bonus granted by their employer.

The petition states: “If an employee is fortunate enough to receive a 13th-month bonus, and he or she sees the net amount of that bonus arrive at well below the amount of his or her normal salary, that is simply not fair. A bonus awarded to an employee on the basis of merit and dedication to his or her work and company should not be taxed.”

Parliament must now verify all signatures and then schedule a public debate at the Chamber of Deputies with lawmakers and government representatives.

Statec reports that bonuses make up a particularly large part of salaries in Luxembourg, the third highest proportion in Europe at 15% (trailing Austria and Portugal) and nearly double the continent’s average of 8%.

While bonuses are thus significant parts of salaries in the grand duchy, they are not distributed evenly across the population: nearly half of all bonuses are awarded either in the finance/insurance sector or the scientific/technical sector, Statec says.