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If you work in Luxembourg, whether you are a cross-border worker or a resident, your salary will increase from July onwards.
The reason for this is that the energy tax credit (CIE) will enter into force on 1 July 2022. The tax credit is part of a series of measures put in place by the Luxembourgish government to compensate for the steep rise in energy prices.
Initially scheduled for August, the government ultimately decided that the CIE will be paid to all those working in Luxembourg from July onwards, with the exception of “high earners”, i.e. those who earn more than €100,000 a year. The CIE comes into force at a time when inflation is reaching record levels in the Grand Duchy.
And as the next wage indexation has been postponed until spring 2023, the CIE will act as a compensation mechanism from next month. The Ministry of Finance confirmed this information to the business magazine Paperjam.
For salaries below €3,667 gross per month, this amounts to an increase of €84 net. It should be noted that the amount of this aid is degressive. However, the good news is that all salaries below or equal to €5,000 gross will benefit from the CIE slightly more than they would have from a wage indexation.
A person earning €5,000 gross per month, for example, will see their salary increase by €78 net with the energy tax credit, compared to €62 if a wage indexation had been triggered. The difference is obviously that the salary increase provided by the index is permanent, while the CIE is a temporary aid.
Finally, it is important to know that obtaining the energy tax credit requires no additional steps. The CIE will simply be added to your pay slip. Another piece of good news is that pensioners, recipients of the Social Inclusion Income (REVIS), and those receiving the Allowance for the Severely Disabled (RPGH) will also benefit from this tax credit.