Major Tax System Reform in Luxembourg with the Introduction of Pre-Filled Tax Returns
Luxembourg - January 17, 2025
Luxembourg's Tax Administration has unveiled a new initiative aimed at simplifying tax procedures and modernizing the system through digitalization. The Minister of Finance emphasized, "The tax declaration process must be as simple as possible for taxpayers, especially through digitalization and artificial intelligence."
Currently, most taxpayers in Luxembourg complete their tax returns on paper. The government seeks to change this by setting a goal for 85% of tax declarations to be filed online or through the MyGuichet.lu electronic assistant by 2028.
Pilot Launch of Pre-Filled Tax Returns Starting March 2025
As part of this effort, a pilot program for simplified pre-filled tax returns for individuals will launch in March 2025. Initially, 20,000 households will receive letters asking whether they wish to participate in this service. This program will target households with income solely from salaries and pensions, without deductions beyond the standard allowance.
These households will have until April to decide whether to opt in. If they agree, a proposed tax return will be sent in May for their review and necessary corrections. The goal is to cover 100,000 tax returns by 2028.
According to the Tax Administration, "A draft return will be prepared based on available data, and if the taxpayer approves, it will be considered their official declaration."
Advantages of Pre-Filled Tax Returns
This system aims to reduce the workload for taxpayers by automatically filling in information already available to the Tax Administration. This process not only saves time but also minimizes errors and reduces the need for supporting documents.
Implementing this system fully requires legal amendments, including access to banking and insurance data. Additionally, the deadline for sending tax forms will be shifted to April to allow the administration ample time to collect and update data.
Moreover, the Tax Administration will launch an information campaign in March titled "You Ask, We Answer," providing citizens with the opportunity to ask questions directly to representatives of the administration.
The Ministry of Finance also plans to submit proposals for individualizing the tax system to the parliament this year, hoping to reach a consensus on the matter.
Luxembourg Police Warns Against Fake Fine Payment Messages
Luxembourg - January 17, 2025
The Luxembourg Police have issued a warning about a rising number of fraudulent text messages and emails claiming recipients owe unpaid fines and urging immediate payment to avoid increased penalties.
Authorities emphasized that official institutions, including the police and customs, never request fine payments via SMS or email. Legitimate fine notifications are always sent through official postal mail.
Police Recommendations to Avoid Falling Victim to These Scams:
Do Not Succumb to Pressure: Never respond to threats demanding immediate fine payments or warnings about increased penalties.
Verify Suspicious Messages: If in doubt, carefully review the message and consult someone you trust if necessary.
Watch for Spelling Errors: Messages with unusual spelling or grammatical mistakes could be signs of fraud.
Contact Official Authorities: If unsure about the authenticity of a message, directly contact the relevant institution for verification.
The police urge all citizens to remain vigilant and immediately report any suspicious messages to law enforcement to help prevent falling victim to scams.
Significant Surge in Respiratory Infections in Luxembourg
Luxembourg - January 17, 2025
The Luxembourg Health Authority has reported a substantial increase in acute respiratory infections, including COVID-19, influenza, and Respiratory Syncytial Virus (RSV), according to its latest weekly report.
The report indicates that confirmed influenza cases have risen sharply from 746 to 1,342, marking an 80% increase compared to the previous week. Laboratory results show that 77% of these cases are influenza type A, while 23% are type B.
Additionally, RSV cases have surged by 36%, climbing from 171 to 232 confirmed cases. During the second week of 2025 (January 6–12), positive COVID-19 (SARS-CoV-2) cases increased from 65 to 94, reflecting a 45% rise. However, viral concentration detected in wastewater has shown a decline.
How to Prevent Seasonal Influenza?
In addition to vaccination—especially for vulnerable groups and the elderly—it is essential to follow health guidelines to reduce the spread of the virus:
Regular Handwashing: Wash hands with soap and water for 30 seconds, paying attention to palms, fingers, backs of hands, and under the nails.
Cover Mouth and Nose: Use a tissue when coughing or sneezing. If unavailable, use the inner elbow.
Dispose of Used Tissues Properly: Immediately throw used tissues into the trash and wash hands afterward.
Avoid Physical Contact: Refrain from handshakes, hugging, and kissing.
Stay Away from Crowded Places: Avoid gatherings and crowded spaces during outbreaks.
Stay Home When Sick: If you exhibit symptoms, stay home to prevent spreading the virus to others.
Ensure Proper Ventilation: Air out enclosed spaces 3–4 times daily for at least 10 minutes each time.
By following these simple precautions, individuals can play a vital role in protecting both their health and the health of the community.
Luxembourg Auto Festival Kicks Off with a Focus on Electric Vehicles
Luxembourg - January 17, 2025
Luxembourg's largest annual automotive event, the Autofestival, will officially commence on January 25, 2025. However, special offers for this event are already available for buyers. The Federation of Automotive Distributors and Mobility (Fedamo) has highlighted the growing electric vehicle (EV) market in 2024, marking this festival as an ideal opportunity for car purchases, despite a 5% decline in new vehicle registrations compared to last year.
What Is the Autofestival?
For those unfamiliar with this event, the Autofestival is not a centralized exhibition in one location. Instead, it takes place across Luxembourg in over 90 car dealerships. Visitors can explore a wide range of brands and models, test-drive vehicles, and take advantage of special sales offers. Unlike traditional auto shows, the Autofestival provides an expansive and interactive experience nationwide, allowing customers to compare brands and negotiate directly with dealers.
Return to the Traditional Festival Format
After several years of extended formats, this year’s Autofestival will run for 10 days, from January 25 to February 3, 2025, across 90 showrooms. This event presents a prime opportunity for visitors to explore over 170 dealerships, compare vehicle models, test-drive cars, and negotiate favorable prices and features.
Favorable Economic Conditions for Buyers
Despite rising car prices in 2024, the Federation of Automotive Distributors emphasizes that current economic conditions are favorable for buyers. Lower interest rates, attractive leasing options, extended incentives for electric vehicle purchases, and quick delivery times are among the advantages.
Continued Government Support for EV Purchases
Government subsidies for electric vehicle purchases remain a significant incentive. Although this subsidy has been reduced from €8,000 to €6,000, it is still available for vehicles consuming less than 16 kWh per 100 km. Under new regulations effective from October 1, buyers must now retain their vehicle for three years instead of one.
Decline in New Vehicle Registrations in 2024
Reports show that new vehicle registrations in Luxembourg dropped by 5.1% in 2024, totaling 46,635 units. However, personal vehicle purchases increased by 10%, fueling optimism for market growth in 2025.
Gradual Increase in EVs in the Transportation Sector
Registered electric vehicles in 2024 accounted for 36% of new registrations, up from 26% in the previous year. However, this figure is still short of the 49% target set for 2030. Currently, electric vehicles make up only 10.9% of the country’s vehicle fleet. Projections indicate that this target will be achieved by 2035, with the share expected to reach around 40% by 2030.
Outlook for Luxembourg's Automotive Market
With rising interest from private buyers and the gradual return of companies to the automotive market, the 2025 Autofestival is expected to play a crucial role in market stimulation. Analysts believe that the expiration of current leasing contracts will trigger a new wave of car purchases and replacements.
Luxembourg Eliminates Test Requirement for Switching from Automatic to Manual Driver's License
Luxembourg - January 17, 2025
The Luxembourg Ministry of Transport has announced that drivers holding a category B driver's license for automatic vehicles will no longer be required to take an additional test to drive manual cars. From now on, completing a training course at an accredited driving school will suffice.
This decision aligns with international standards and aims to remove barriers for drivers. Many European countries, such as France and Germany, have already implemented similar policies, and European Union regulations do not mandate a retest for this transition.
According to the Ministry of Transport, implementing this measure will require amendments to traffic laws, drafting new legislation, and obtaining approval from legal authorities, with full implementation expected by summer.
Boosting the Appeal of Automatic Driver's Licenses
Previously, drivers with an automatic license had to complete 16 hours of training and pass a test to receive a category B license with code 78, which restricted them from driving manual vehicles. To lift this restriction, they were required to complete six hours of manual driving lessons and pass another test. Under the new system, presenting a certificate of course completion from a driving school will be sufficient to remove this restriction.
This change enhances the attractiveness of automatic licenses and simplifies the process of transitioning to manual vehicles. Previously, the need for a retest deterred some drivers from upgrading their licenses.
Impact on Driving Schools and the Automotive Market
Eliminating the retest benefits not only drivers but also driving schools. With the growing production of automatic vehicles and the gradual decline in manual car manufacturing, driving schools can more easily procure training vehicles. Additionally, the expansion of electric and hybrid vehicles, which are predominantly automatic, makes this adjustment necessary.
This reform is expected to simplify the driver training process and offer more flexible options for drivers in the future.
Serious Crisis in the Coffee Market: Rising Coffee Bean Prices and Challenges for Coffee Sellers
Luxembourg - January 17, 2025
The coffee industry is facing a serious crisis. In 2024, the price of green coffee beans surged by up to 70%, and experts predict that this trend will continue with an additional 30% increase in the coming year. This price surge has posed significant challenges for coffee sellers and producers.
Many coffee vendors and roasters have yet to pass these increased costs on to consumers. However, in the coming months, the price of a cup of coffee is expected to rise noticeably. In addition to the rising cost of green coffee beans, increasing energy, transportation, and packaging expenses have put substantial pressure on industry players.
Reduced Profit Margins and Customer Concerns
Many coffee sellers have been forced to absorb part of these increased costs to retain customers. Excessive price hikes may drive customers toward cheaper coffee options, compelling industry players to reduce their profit margins.
Impact of Climate Change on Coffee Production
Severe climate fluctuations, particularly in major coffee-producing countries such as Brazil and Vietnam, have significantly reduced crop yields. Persistent droughts and floods have led to a decline in both the quality and quantity of coffee products, directly impacting prices.
Challenges for Small Producers Under New Regulations
Another challenge facing coffee producers is the European Union's new regulations aimed at combating deforestation. These regulations require producers to make their supply chains more transparent. Although this measure aims to protect the environment, it imposes high costs on small producers, potentially pushing them toward alternative markets like the United States, Russia, or China.
Reduced Variety and Increased Prices for Specialty Coffees
It is anticipated that the diversity of specialty coffees will decline in the near future, accompanied by significant increases in final product prices. To counter this situation, producers are seeking to diversify their sources of coffee beans and even increase domestic production.
Creative Solutions to Maintain Quality
In response to these challenges, coffee sellers are exploring innovative ways to maintain product quality and price stability. Introducing new coffee varieties and improving cost management are among the measures that can support the sustainability of this industry.
With the ongoing rise in coffee bean prices, both large and small producers face difficult conditions. Industry stakeholders remain hopeful that by adopting effective strategies, they can navigate this crisis while preserving the quality and diversity of their products.
