Requesting tax relief for hiring an unemployed person

This page was last modified on 31-08-2017

Employers who hire a job seeker may be entitled to receive tax relief.

Applications must be submitted to the National Employment Agency (Agence pour le développement de l'emploi - ADEM).

Forms / Online services

Carry out your procedure:

  • With an online service

    • Bonification d'impôt pour embauche de chômeur
  • By downloading a form

Who is concerned

Eligible businesses

This financial aid is available to:

  • commercial, industrial, mining and craft businesses;
  • businesses generating their profits from agricultural and forestry activities;
  • liberal professions.

The following are not eligible for this financial aid:

  • temporary work agencies;
  • private households.

Eligible job seekers

For the employer to be entitled to tax relief, the job seeker hired must:

  • be unemployed;
  • be registered with ADEM for at least the last 3 months;
  • be assigned by ADEM's placement service.

The tax relief can also be granted in the case of:

* In this case, the placement periods in the employment programme before hiring will be taken into account in the compulsory registration period of 3 months with ADEM.

The tax relief is not granted to employers who:

Prerequisites

The employment contract offered to the worker must be:

  • a permanent contract (contrat à durée indéterminée - CDI);
  • a temporary contract (contrat à durée déterminée - CDD) of a minimum of 18 months;
  • a temporary contract with a view to replacing an employee who is on parental leave (congé parental, this must be specified in the contract).

The contract must be for at least 16 hours per week.

How to proceed

Initial application

The employer must submit a request for tax relief for hiring an unemployed person to ADEM.

The request must be accompanied by a copy of the employment contract.

At the beginning of the financial year following the employment of the job seeker (and for each subsequent financial year), ADEM shall issue a "certificate confirming the placement and continuation of the job" (certificat attestant le placement et la continuation de l'emploi).

Tax return

In order to receive the tax relief, employers must include the following documents with their tax return to be submitted to the Luxembourg Inland Revenue (Administration des contributions directes - ACD):

Duration of aid

The tax relief may be awarded for a maximum duration of 36 months, provided that the employment contract is maintained throughout this period.

In the event of termination of the contract, the employer shall cease to be entitled to the tax relief as of the month of such termination.

The tax relief is deducted from the income tax due with respect to the fiscal year in which the remuneration was paid.

Should the level of tax be too low, the unused tax relief can be deducted from the tax payable in respect of the next 10 fiscal years.

Degree of aid

The monthly tax relief shall amount to 15 % of the gross monthly remuneration which is deductible as an operating expense.

Who to contact

National Employment Agency (ADEM)
1, boulevard Porte de France
L-4360 - Esch-sur-Alzette
Postal box B.P. 289 L-4003 Esch-sur-Alzette
Luxembourg
Phone: (+352) 247-88000
Fax: (+352) 40 59 88
Email info.mai@adem.public.lu