Luxembourg VAT guide
Luxembourg VAT guide for businesses
The Grand Duchy of Luxembourg’s Value Added Tax (VAT) system came into effect in January 1970. The basic VAT Law of 12 February 1979 is based on EU VAT directives, as the country is a member of the European Union.
VAT is collected by the Registration and Property Administration (Administration de l’Enregistrement, des Domaines et de la TVA) which is separate from the direct tax administration.
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What is the standard VAT rate in Luxembourg?
17%
Standard VAT rate: 17%
There are four VAT rates in Luxembourg apart from zero-rated VAT, which are the following (excluding the special flat rate applicable to the agricultural and forestry sector).
The Standard VAT Rate in Luxembourg is 17%. It is applicable to supplies of all goods and services that are not listed among the reduced-rated supplies. It is the lowest standard rate in the European Union.
Reduced VAT rates: 3% | 8% | 14%
The super reduced rate of 3% applies to certain foods, water supply, certain medicinal products, newspapers, books, etc.
The reduced rate of 8% is applicable to cleaning, hairdressing, minor repair of bicycles, shoes, leather goods etc.
The intermediary rate of 14% applies to washing and cleaning products, certain types of fuels, wines of fresh grapes with 13% vol. or less, etc.
Requirement to register for VAT
Taxable persons have to register for VAT within 15 days from the date on which they start their activities unless they are formally excluded from this obligation.
Taxable persons whose annual turnover excl. tax during a calendar year has not exceeded €35,000 benefit from a VAT exemption
You must register for VAT if you meet any of the following:
• You are established in Luxembourg and carry out taxable activities
• You are established in Luxembourg and expect your annual turnover to exceed €35,000
• You are a non-taxable legal person making intra-Community acquisitions of goods over €10,000 (excluding tax) pey year
• You are established in Luxembourg and subject to the agricultural and forestry flat-rate tax scheme
• You are established in Luxembourg and supply wine, sparkling wine, wood or capital goods exceeding €35,000
• You are established and VAT-registered in another EU country and supply goods to non-VAT registered persons in Luxembourg, exceeding €100,000 per year (e.g. distance sales).
The registration for VAT must take place
• Within 15 days after starting your activity if you are not exempt from registration
• Before the first day of the month following the month when you exceed the tax exemption limit in the same calendar year
• Before you carry out any of these operations if you are exempt or not liable for VAT:
o Providing services in another EU country where the buyer pays the VAT
o Making intra-Community acquisitions of goods subject to VAT in Luxembourg
o Buying services from providers outside Luxembourg when you, as the buyer is liable for VAT.
Deadlines
In principle, taxable persons must pay the net amount of VAT (i.e. the positive result between the total of output VAT for one period minus the total of input VAT) before the 15th of the month following the end of the tax period. For this purpose, they must in principle file a return within the same interval.
For those taxpayers who submit only Annual return the deadline is before 1 March of the following year.
For those taxpayers who submit Monthly/Quarterly return besides Annual return, the deadline of submitting Annual return is before 1 May of the following year.
VAT filing frequency
The net turnover of the previous year should be considered. In case of a new entity the turnover should be estimated.
Taxpayer has to submit Monthly and Annual return if the net turnover is lower than €620,000
Below €30,000 turnover there is no obligation to file return, however the Tax Authority should be informed about the calendar year turnover before 1 March.
Taxpayer has to submit Annual return if the net turnover is lower than €112,000.
Taxpayer has to submit Quarterly and Annual return if the net turnover is higher than €112,000 and lower than €620,000.
Invoicing requirements for Luxembourg
Invoices must include the following information:
- The date of issue
- A sequential number, based on one or more series, which uniquely identifies the invoice
- Supplier VAT number
- Where the customer is liable to pay the VAT, customer VAT number
- The supplier’s full name and address and of his customer
- The quantity and nature of the goods or the extent and nature of the services
- The date the supply was made or completed, or the date the payment was received – if it’s known and different from the invoice issue date
- Where the VAT becomes chargeable on receipt of payment in accordance with article 25 of the VAT Law, the mention “cash accounting scheme”
- The VAT amount payable, except where a specific arrangement is applied for which the law excludes such a detail
- The taxable amount per rate or exemption, the unit price exclusive of tax and any discounts or rebates if they are not included in the unit price
- The VAT rate applied
- Where an exemption is involved, reference to the appropriate provision of the Luxembourg VAT Law or the VAT Directive, or any indication that the supply is exempt
- Where the customer is liable to pay the tax, the mention “reverse charge”
- Where the travel agent scheme referred to in article 56bis applies, the mention “travel agent scheme”
- For the supply of new means of transport: the information required for identifying the means of transport, including the nature, registration number, mark, type, carriage number, year of production, date of first use and the characteristics of the ships, aircraft, and motorised land vehicles referred to in section 1.3
- Where the margin scheme is applied, the mention “special scheme – second-hand goods”, “special scheme – works of art” or “special scheme – collectors’ pieces and antiques”
- Where the customer receiving a supply issues the invoice instead of the supplier, the mention “self-billing”
- Where the person liable for payment of VAT is a fiscal representative for the purposes of article 66bis of the VAT Law, the VAT number of that representative, together with his full name and address.
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Agents and fiscal representatives
Appointing a VAT representative is optional in Luxembourg. If a non-resident business appoints a VAT representative, that representative takes on all VAT obligations on the business’s behalf.
The appointment of a VAT representative is possible in respect of the following transactions:
- For the importation of goods into Luxembourg
- The subsequent supply to the non-resident business or a 1/3 party; and
- Services (such as handling and recovery operations) performed on these goods in Luxembourg between the import and the subsequent supply.
The VAT representatives and the taxable person are jointly liable for the payment of the VAT, interest and penalties.
Submission
Since January 2020, businesses must submit all VAT returns – monthly, quarterly or annually – electronically through the eCDF system.
Extended filling deadline
For monthly and quarterly VAT returns, the Tax Authority automatically grants a 2-month extension. For annual returns, the extension is 8 months.
IOSS
Since 1 July 2021, the EU has removed the VAT exemption on low value goods. Since that date, all sales of goods imported in the EU are subject to the VAT of the country of destination of goods, regardless of the value of the imported goods.
For sales of imported goods with a valued at €150 or less, sellers can simplify VAT compliance across the EU by using the the Import One Stop Shop (IOSS). This system lets sellers declare and pay VAT in all EU Member States through a single registration and include VAT in the sale price to the buyer.
IOSS applies to distance sales of goods that meet all of the following conditions:
- The seller dispatches or transports the goods from a third country or territory to an EU-based buyer
- The total value of the shipment does not exceed €150
- The goods are not subject to excise duties (such as alcohol or tobacco)
Using IOSS helps streamline cross-border e-commerce, speeds up delivery and creates a smoother buying experience for customers.
What sellers need to do
If you choose to use the IOSS to declare sales to private individuals in the EU, you must:
- Submit a monthly VAT declaration electronically using the IOSS portal
- Make a monthly payment of the corresponding VAT to the Member State of their IOSS identification
- Keep detailed records of all sales declared via the IOSS, and keep such records for 10 years
If you don’t use IOSS
When sellers don’t opt into IOSS, the buyer becomes responsible for VAT. That means they’ll need to:
- Cover any additional administrative fees charged by the carrier
- Pay VAT at the time of delivery
Choosing IOSS creates a smoother experience for customers — with no surprise fees and faster customs clearance.
SAF-T / FAIA
The OECD (Organisation for Economic Co-operation and Development) developed the Standard Audit File for Tax (SAF-T) to support consistent, electronic tax audits across countries. Luxembourg is among the countries that have adopted SAF-T, using the standard format and test procedures to streamline and strengthen audit processes.
In Luxembourg, the “Registration Administration computerised audit file” (FAIA) is largely modelled on the OECD “Standard audit file-Tax”. In principle , the VAT Tax Authorities can request a FAIA compliant file for the taxable years starting 2011. Every VAT inspector has the discretion to demand the file at the occasion of an audit. Currently, the scope of FAIA includes businesses that are subject to the Luxembourg Standard Chart of Account (hereinafter “SCA”).
The following type of companies are in scope of the SCA:
• Corporate entities with limited liabilities (SA, SARL, SCA, Société Coopérative, SE)
• Individual business owners, General Corporate Partnerships (SNC) and Limited Corporate Partnerships (SCS), if their annual turnover exceeds €100,000 (exclusive of VAT)
• Branches and establishments set up in Luxembourg by businesses governed by foreign law.
The format for the FAIA file should be XML. For any additional information requested, VAT authorities accept other formats if the files are easily legible.
The Luxembourg FAIA file covers the records directly or indirectly relevant to verify the correctness of the VAT reporting , and that the company keeps electronically. The obligatory and facultative fields of the Luxembourg FAIA file are based on the OECD’s SAF-T version 2.0., available on the website of the VAT authorities.
Intrastat
In principle, every natural or legal person established in Luxembourg who trades in goods with other EU Member States (intra-Community operators) must provide statistical information about these exchanges to the STATEC.
Registration
Based on the VAT returns filed, STATEC is aware of Intra-Community movements of goods and send a notification to the taxpayer to inform of obligations.
Threshold
You don’t need to submit a declaration if your annual turnover is lower than €200,000 for arrivals and €150,000 dispatches. You must declare as soon as your exceed the following thresholds:
- Threshold for Simplified declaration for arrivals is €375,000
- Threshold for Detailed and Extended declaration for arrivals is €2,500,000
- Threshold for Simplified declaration for dispatches is €375,000
- Threshold for Detailed and Extended declaration for dispatches is €4,500,000
Deadlines and filing frequency
Businesses must declare their intra-Community exchanges on a monthly basis at the latest:
- On the 6th working day of the month following the month of reference, if the report is submitted on paper;
- On the 16th working day of the month following the month of reference, if the report is submitted electronically.
Submission
In Luxembourg, these declarations must be made to the Intrastat Department of the National Institute for Statistics and Economic Studies (Institut national de la statistique et des études économiques – STATEC).
Businesses may send their reports In paper format or electronically through the IDEP software package.
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