Expense claims in Luxembourg: tax-free allowances, 2026 rates and receipts

When is a travel expense reimbursement tax-free in Luxembourg?

A travel and subsistence allowance is tax-free if it is paid separately from salary and does not exceed that of a comparable State civil servant (Article 115, No. 3, of the Income Tax Law, L.I.R., and Grand-Ducal Regulation of 3 December 1969). For the Luxembourg Inland Revenue (Administration des contributions directes, ACD), the part above that amount is a taxable salary supplement (Circular L.I.R. No. 115/6 of 13 July 2018).

• Business trip: it is required by the job and leads outside the municipality of the usual place of work, at least 3 km away; with no usual place of work, the reference is the employer's registered office.
• Higher actual costs: the exemption can extend to actual expenses less 'household savings' (frais de ménage économisés, 20% of the civil servant's allowance), without falling below the civil servant's allowance.
• Flat allowances: a flat travel allowance set on any basis other than the distance travelled is not tax-free.
• Special schemes: Circular No. 115/6 provides flat rates for building sites, postings and drivers.

The home-to-work journey is never a business trip. The employer's contribution (flat allowance, fuel, ticket, season ticket) is taxable salary, because this journey is covered by the employee's flat-rate deduction: €99 a year per distance unit beyond the first 4, up to €2,574 a year. Only collective transport organised by the employer escapes this rule. Likewise, paying the costs of an employee's private car outside business trips amounts to paying salary; for a car made available by the employer, see company cars in Luxembourg. The employer withholds the tax and is personally liable for it.

Travel and subsistence: the State's 2026 rates

Since 1 January 2026, travel by State staff follows the Grand-Ducal Regulation of 17 December 2025, and the amounts set under it by the regulation of 23 January 2026, in force since 1 February 2026, serve as the tax-free ceiling for private-sector employees. The rules that matter for your expense claims:

• a flat daily allowance is only due if the trip lasts more than 4 hours;
• the starting point is the workplace, or home if the trip starts there and the journey is shorter, and the home-to-work journey is not compensated;
• a trip within 25 km beyond the border counts as a trip in Luxembourg;
• the night is reimbursed on receipts (room, breakfast, service and taxes) up to the cap, assessed as an average over consecutive nights; without a hotel bill, the allowance is 20% of the night allowance;
• representation expenses are outside the scope.

Night caps are increased by 10% in the country holding the presidency of the Council of the European Union. For mileage, the State allowance remains €0.30 per km driven in a private car: the regulation of 19 June 2015 that sets it is still listed as in force on Legilux on 5 October 2026, and the regulation of 23 January 2026 did not repeal it.

Worked example: what is tax-free and what becomes salary

An employee based in Luxembourg City drives their own car to see a client 30 km away, 60 km there and back, and is away for 5 hours. In the same month, they spend a night in Paris for a trade fair, and their contract provides for a monthly 'travel' allowance.

Taxable amounts go through payroll as salary, subject to tax withholding and social contributions; for the mileage excess, higher actual costs that are documented can extend the exemption. Pay tax-free allowances on a line separate from salary. How an approved claim reaches payroll is covered in from time clock to payroll in Luxembourg.

Meal vouchers in 2026: value, employee share and tax exemption

A meal voucher is tax-free for the part between the value of a meal, set at €2.80, and €15, so at most €12.20 per voucher, since the 2024 tax year (Article 115, No. 21, L.I.R. and Grand-Ducal Regulation of 29 December 1986, amended on 25 September 2023). For a full exemption, the employee therefore pays at least €2.80 per voucher. Private-sector meal vouchers are not subject to social contributions and are not declared to the Joint Social Security Centre (Centre commun de la sécurité sociale, CCSS).

• The voucher has been digital since 1 January 2025, is valid for 12 months and is strictly personal: it cannot be transferred to anyone, not even a family member.
• It pays for a meal or food from an affiliate established in Luxembourg; use abroad is excluded, which directly affects cross-border workers.
• The employee uses at most 5 a day, and the condition of a main meal taken on a working day has been abolished (Circular L.I.R. No. 115/7 of 31 January 2025).
• The voucher's value is not capped, but the exemption remains at most €12.20.
• The exemption is reserved for employers without a canteen, assessed per establishment, unless there is an objective impediment.
• The employee's contribution is set first against the taxable part; by the end of the year at the latest, the employer draws up the statement of taxable and tax-free parts and attaches it to the payroll account.

Example: for a €15 voucher with €2.80 paid by the employee, the employer's €12.20 is tax-free. If the employee pays only €2, the employer funds €13, of which €0.80 is taxable.

Receipts, VAT and e-invoicing: what to keep and what to deduct?

Expense claims, receipts and invoices are kept for 10 years: from the close of the financial year for accounting records (Article 16 of the Commercial Code, digital copies accepted) and from their date for invoices, whose authenticity, integrity and legibility must be guaranteed throughout.

• Only Luxembourg VAT is deductible in Luxembourg. VAT paid in another Member State, for a hotel in Paris for example, is reclaimed from that country's tax authority.
• Up to €100 including VAT, a simplified invoice is enough (date, supplier, type of purchase, VAT or the data needed to calculate it); above that, a full invoice in the company's name and address is required.
• Luxembourg VAT rates are 17%, 14%, 8% and 3%.
• Fines, penalties and settlements paid by the company are not tax-deductible.

Business-to-business e-invoicing is in preparation. Bill No. 8815, tabled on 30 July 2026 and not yet passed on 5 October 2026, would cover mandatory invoices between an issuer and a recipient established in Luxembourg, for a transaction taxable in Luxembourg: an obligation to receive e-invoices compliant with the European standard EN 16931 from 1 January 2028, then to issue them by 1 July 2028 at the latest if the company exceeded two of these three criteria in 2026 (balance sheet of €7.5 million, turnover of €15 million, 50 full-time employees on average), and by 1 January 2029 at the latest otherwise. A PDF is not an e-invoice.

Common mistakes

• Paying a fixed monthly 'travel' allowance: it is not tax-free, because it does not depend on the kilometres driven.
• Reimbursing a cross-border worker's train or fuel for the home-to-work journey outside payroll: it is taxable salary.
• Keeping the old rates after 1 February 2026, or paying a daily allowance for a trip of 4 hours or less.
• Paying a full flat-rate night without a hotel bill: only 20% of the night allowance is tax-free.
• Believing the meal voucher is capped at €15: it is the exemption that is capped at €12.20, and an employee share below €2.80 creates a taxable part.
• Archiving PDFs and thinking you are ready for e-invoicing: a PDF is not an e-invoice.

Your checklist

• Write an expenses policy: who approves trips, which rates apply, caps, deadlines for submitting claims, required documents.
• Apply the State rates in force since 1 February 2026, with the more-than-4-hours rule.
• Calculate mileage on the actual distance of the business trip, excluding the home-to-work journey.
• Require the hotel bill; without one, limit the exemption to 20% of the night allowance.
• Pay allowances separately from salary and subject any excess to tax withholding and contributions.
• For meal vouchers, deduct at least €2.80 per voucher, check there is no canteen and draw up the annual statement.
• Keep claims, receipts and invoices for 10 years, intact and legible.
• Prepare to receive e-invoices from 1 January 2028, the date planned by Bill No. 8815.

Frequently asked questions

Official sources

• Grand-Ducal Regulation of 3 December 1969 (Article 115, No. 3, L.I.R.: travel and subsistence), Legilux
• ACD, Circular L.I.R. No. 115/6 of 13 July 2018 (travel expenses)
• Government in Council Regulation of 19 June 2015 (mileage allowance), Legilux
• Grand-Ducal Regulation of 17 December 2025 on State travel and subsistence expenses, Legilux
• Government in Council Regulation of 23 January 2026 (daily and night allowances), Legilux
• Grand-Ducal Regulation of 25 September 2023 (meal vouchers), Legilux
• ACD, Meal vouchers: rules of use
• Commercial Code, consolidated version of 3 August 2026, Article 16 (Legilux)
• Guichet.lu, Deducting input VAT
• Chamber of Deputies, Bill No. 8815 (e-invoicing)

This guide sets out the general rules in force on 5 October 2026. It is not legal advice for your situation (collective agreement, sector, employee status).