Luxembourg VAT guide
Value Added Tax (VAT) was introduced in the Grand Duchy of Luxembourg on 1 January 1970. The Luxembourg VAT system is governed by the VAT Law of 12 February 1979, which has been regularly updated in line with EU VAT directives, as Luxembourg is a member of the European Union.
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What is the standard VAT rate in Luxembourg?
17%
The standard VAT rate in Luxembourg is 17%, which is the lowest standard rate in the European Union. It applies to all goods and services that are not subject to a reduced rate.
Luxembourg applies three reduced VAT rates:
Reduced VAT rates: 3% | 8% | 14%
Super-reduced rate: 3%
Applies to essential goods and services, including certain food products, water supply, pharmaceutical products, books and newspapers
Reduced rate: 8%
Applies to selected labour-intensive services such as cleaning services, hairdressing and minor repair services
Intermediary rate: 14%
Applies to specific goods and services, including certain fuels, cleaning products and wine
A flat-rate compensation scheme applies to the agricultural and forestry sectors. This is not a VAT rate but a simplified mechanism for non-VAT registered farmers.
VAT registration in Italy
Domestic registration
Taxable persons must register for VAT in Luxembourg within 15 days of commencing taxable activities, unless they qualify for an exemption.
Small enterprise exemption
Businesses established in Luxembourg whose annual turnover (excluding VAT) does not exceed €35,000 may benefit from a VAT exemption regime. Under this regime, VAT is not charged on supplies, but input VAT cannot be recovered.
Mandatory VAT registration
VAT registration is required in the following cases:
- A business established in Luxembourg carries out taxable activities
- A business established in Luxembourg expects its annual turnover to exceed €35,000
- A non-taxable legal person makes intra-Community acquisitions of goods exceeding €10,000 per year (excluding VAT)
- A business established in Luxembourg is subject to the agricultural and forestry flat-rate scheme
Cross-border transactions
Businesses established in other EU Member States supplying goods or services to consumers in Luxembourg must account for VAT where the EU-wide distance selling threshold of €10,000 is exceeded (via OSS or local VAT registration)
Registration deadlines
VAT registration must be completed:
- Within 15 days after starting taxable activity
- Before the first day of the month following the month in which the €35,000 exemption threshold is exceeded
- Before carrying out certain transactions where VAT obligations arise under EU rules (e.g. intra-Community acquisitions, reverse-charge services)
Deadlines
In Luxembourg, taxable persons must calculate and pay the net amount of VAT (output VAT minus input VAT) for each reporting period.
- VAT returns and payments are generally due by the 15th day of the month following the end of the reporting period
Annual VAT return
All VAT-registered businesses must submit an annual VAT return, with deadlines depending on their filing obligations:
- Taxpayers submitting only an annual VAT return:
- Deadline is by 1 March of the following year
Taxpayers submitting periodic (monthly or quarterly) VAT returns in addition to an annual return:
- Deadline is by 1 May of the following year
VAT filing frequency
The filing frequency depends on the net annual turnover of the previous calendar year (or estimated turnover for new businesses):
- Up to €30,000: The taxpayer must notify the tax authorities of annual turnover by 1 March
- €30,001 to €112,000: Annual VAT return only
- €112,001 to €62
- 0,000: Quarterly VAT returns, annual VAT return
- Above €620,000: Monthly VAT returns, annual VAT return
eInvoicing requirements for Luxembourg
Luxembourg currently operates a limited eInvoicing regime.
B2G (Business-to-Government):
- Mandatory since 18 March 2023
- Applies to all suppliers issuing invoices to public sector bodies
B2B (Business-to-Business):
- Not mandatory
- Electronic invoicing is optional and requires agreement between parties
B2C (Business-to-Consumer):
- Not mandated
Invoices must be issued in a structured electronic format compliant with the European standard EN 16931 and are typically transmitted via the PEPPOL network.
Luxembourg is expected to introduce further eInvoicing and digital reporting obligations in line with the EU VAT in the Digital Age (ViDA) initiative, which will require mandatory eInvoicing for intra-EU B2B transactions from 1 July 2030.
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Agents and fiscal representatives
The appointment of a VAT representative in Luxembourg is generally optional. Both EU and non-EU businesses may register for VAT directly without the need to appoint a fiscal representative.
The appointment of a VAT representative in Luxembourg is generally optional. Both EU and non-EU businesses may register for VAT directly without the need to appoint a fiscal representative.
Where a VAT representative is appointed:
- The representative acts on behalf of the taxable person
- The VAT representative and the taxable person are jointly and severally liable for the payment of VAT, as well as any interest and penalties
Submission
Since January 2020, businesses must submit all VAT returns (monthly, quarterly or annually) must be submitted electronically via the eCDF system.
Extended filling deadline
In practice, the Luxembourg tax authorities grant extended filing deadlines:
- Monthly and quarterly VAT returns: a 2-month extension is generally applied
- Annual VAT returns: an extension of up to 8 months is typically granted
These extensions are applied automatically in most cases, providing additional time for compliance.
IOSS
Since 1 July 2021, the EU has abolished the VAT exemption for low-value goods. As a result, all goods imported into the EU are subject to VAT in the Member State of destination, regardless of their value.
For distance sales of imported goods with an intrinsic value not exceeding €150, sellers can simplify VAT compliance by using the Import One Stop Shop (IOSS).
The IOSS allows sellers to declare and pay VAT due in all EU Member States through a single registration and to collect VAT at the point of sale. IOSS applies to distance sales of goods that meet all of the following conditions:
- Goods are dispatched or transported from a third country or territory to a consumer in the EU
- The intrinsic value of the consignment does not exceed €150
- The goods are not subject to excise duties (e.g. alcohol or tobacco)
What sellers need to do
- Submit a monthly VAT return via the IOSS portal
- Pay the corresponding VAT to their Member State of identification
- Keep detailed records of all IOSS transactions for 10 years
If IOSS is not used
Where sellers do not use the IOSS:
- VAT is collected at importation
- The customer is responsible for paying VAT and any administrative fees charged by the carrier
Using the IOSS simplifies VAT compliance, speeds up delivery and improves the customer experience by avoiding unexpected charges at import.
SAF-T / FAIA
The Standard Audit File for Tax (SAF-T) is an OECD-developed standard designed to facilitate electronic tax audits through a consistent and structured exchange of accounting data.
In Luxembourg, the “Fichier d’Audit Informatisé de l’Administration de l’Enregistrement” (FAIA) is the local implementation of SAF-T. It is largely based on the OECD SAF-T version 2.0 standard.
The Luxembourg VAT authorities may request a FAIA-compliant file during a tax audit for financial years starting from 2011 onwards. Submission is not automatic and is only required upon request by the tax authorities.
The FAIA requirement applies to businesses using the Luxembourg Standard Chart of Accounts (SCA), including:
- Corporate entities with limited liability (e.g. SA, SARL, SCA, Société Coopérative, SE)
- Sole traders, general partnerships (SNC) and limited partnerships (SCS) with annual turnover exceeding €100,000 (excluding VAT)
- Branches or permanent establishments in Luxembourg of foreign entities
The FAIA file must be submitted in a structured XML format. The file includes accounting records and data relevant for verifying VAT reporting and compliance.
The structure and mandatory data fields follow the OECD SAF-T standard, as adapted by the Luxembourg VAT authorities. Additional supporting information may be provided in other formats, provided it is clearly legible.
Intrastat
Intrastat is a statistical reporting system used to collect data on the movement of goods between EU Member States. In Luxembourg, taxable persons engaged in intra-Community trade in goods must provide statistical information to STATEC (Institut national de la statistique et des études économiques).
Threshold
No Intrastat declaration is required if annual trade does not exceed:
- €200,000 for arrivals (imports)
- €150,000 for dispatches (exports)
Once these thresholds are exceeded, reporting obligations apply as follows:
Simplified declaration threshold:
- €375,000 for arrivals and dispatches
Detailed (extended) declaration threshold:
- €2,500,000 for arrivals
- €4,500,000 for dispatches
Deadlines and filing frequency
Intrastat declarations must be submitted monthly once the relevant thresholds are exceeded.
- Paper submission: by the 6th working day of the month following the reporting period
- Electronic submission: by the 16th working day of the month following the reporting period
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