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Income Tax - How are exceptional income taxed?

Verified 07 April 2022 - Legal and Administrative Information Directorate (Prime Minister)

If you earned exceptional income in 2021, this could result in a significant increase in your tax. To limit this tax increase, you can apply for the quotient system.

Revenues are considered exceptional if they exceed your regular revenues and are not renewed annually.

For example:

  • Reimbursement of redemption of retirement quarters (for years of study or incomplete years)
  • Additional Gratification Paid to an Employee for Exceptional Services
  • Compensation door-step collected by the owner
  • Single lump sum payment that replaces a small pension

To be considered exceptional, an income must exceed the average taxable income of the previous 3 years. Comparison applies to income from tax centre.

However, some revenues are considered exceptional regardless of their amount.

This is the case for the following revenues:

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Severance pay (taxable share)

If you received severance pay in 2021, this income is considered exceptional regardless of the amount.

Mobility Award 

If you received a mobility grant in 2021, this income is considered exceptional regardless of its amount.

Voluntary severance

If you received a voluntary severance pay in 2021, this income is considered exceptional regardless of the amount.

Voluntary retirement allowance

If you received a voluntary retirement or retirement allowance in 2021, this income is considered exceptional regardless of the amount.

Advance compensation (in case of termination)

If you received a compensatory notice allowance (time-off in case of termination) in 2021, this income is considered exceptional regardless of its amount.

Quotient system taxation

If you received an exceptional income in 2021, you can claim it as quotient system.

The quota system avoids the progressivity of the scale tax.

It applies in 2 steps:

  1. Add one-quarter of exceptional income to regular income
  2. Multiply by 4 the corresponding tax supplement

Exceptional income tax is paid at one time.

Income to be taxed under the quotient system should not be included in other reported income.

You must enter the total of these revenues by one of the following means:

  • Within the framework provided on page 3 of Declaration No 2042 C (line 0XX)
  • On free paper attached to Declaration No. 2042

You must detail the amount and nature of the exceptional income to be taxed in the quotient, collected by each member of the household.

The 2022 2021 income tax return commenced on April 7, 2022.

The deadline varies depending on whether you file your return on paper or online.

Online Declaration
Deadline to file your tax return online

Department

Reporting deadline

1 to 19

Tuesday 24 May 2022 at 23:59

20 to 54 (including 2A and 2B)

Tuesday 31 May 2022 at 23:59

55 to 974/976

Wednesday 8 June 2022 at 11.59pm

Non-residents

Tuesday 24 May 2022 at 23:59

2022 Online 2021 Income Statement

Paper Declaration

The tax return must be filed before Thursday 19 May 2022 at 23:59, including for foreigner residents.

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