VAT in Luxembourg - a complete guide

Are you sending goods to customers in Luxembourg? Check if you should register for Luxembourg VAT and what the VAT rates are in Luxembourg. Read on.

VAT in Luxembourg - table of contents

The Value Added Tax was introduced in Luxembourg in 1970. Locally, it is referred to as Taxe sur la valeur ajoutée (TVA).

Should you register for VAT in Luxembourg?

Just like in other European Union member states foreign businesses that import, buy, or sell goods in Luxembourg may be required to register for VAT in the country as non-residents.

Registration of a foreign company for Luxembourg VAT is mandatory in the following situations:

importing goods into Luxembourg,
purchasing and selling goods within the country,
accumulating consignment stock in a warehouse for sale,
organizing events and live shows (for which entry is charged at the door),
selling goods to Luxembourg consumers via the Internet (subject to the VAT registration threshold).

Important!

After reaching a turnover of 10,000 euros, online sellers in Luxembourg can opt for VAT OSS. With this, they file a single VAT return covering all EU sales, paying tax according to the buyer’s country rate. Otherwise, they only need to adhere to Luxembourg rules for distance sales.

How to register for VAT in Luxembourg?

To register for VAT purposes, the company must submit a preliminary declaration to the Administration of Registration, Domains, and VAT Office (AED).

VAT registration is required:

within 15 days of starting operations for non-exempt taxpayers,
or taxpayers exempt from registration and for legal entities not subject to tax, before performing the following actions:
- providing services in the territory of another member state, for which tax is payable solely by the recipient of the service,
- intra-Community acquisitions of goods subject to Luxembourg VAT,
- receiving services from service providers located outside Luxembourg, for which the customer is liable to pay VAT.

After registering for VAT purposes, the taxpayer (or legal entity not subject to tax) receives a VAT identification number consisting of the unique group of 8 digits preceded by the letters ‘LU’.

The deadline for submitting Luxembourg VAT returns

In Luxembourg, depending on the revenue size, VAT returns are filed on a monthly, quarterly, or yearly basis.

Frequency of VAT returns:

Turnover up to 112,000 euros — yearly VAT returns,
Turnover from 112,000.01 to 620,000 euros — quarterly and yearly VAT returns,
Turnover above 620,000 euros — monthly and yearly VAT returns.

Taxpayers with turnover below 112,000 euros submit yearly VAT returns by March 1st for the previous year.

quarterly VAT returns by the 15th day of the quarter for the previous quarter. For example, VAT returns for the 1st quarter should be filed by April 15th,
yearly VAT returns by May 1st for the previous year.

Taxpayers with turnover above 620,000 euros submit:

monthly VAT returns by the 15th day of the month for the previous month. For example, VAT returns for February should be filed by March 15th.
yearly VAT returns by May 1st for the previous year.

Compliance with Luxembourg VAT

Foreign companies registered as non-resident VAT entities in Luxembourg are required to strictly adhere to locally established regulations regarding bookkeeping, registering, and processing invoices. This applies to:

preparing invoices with data that comply with Luxembourg regulations,
electronically signed invoices, containing authentication confirmation and recipient consent,
keeping accounts and registers, which should be retained for at least 7 years,
properly invoicing customers for goods or services (following Luxembourg VAT regulations regarding the time of supply),
processing credit notes and any other type of corrections,
using approved foreign currency exchange rates.

VAT rates in Luxembourg

RATE	TYPE	TYPE OF GOODS OR SERVICES
17%	standard	all goods and services not covered by the reduced VAT rate,
14%	reduced	some wines, solid mineral fuels, mineral oils and wood for fuel, except wood for heating, cleaning and washing agents, printed advertising materials, thermal, cooling energy, and water vapor, except for local heating, safekeeping and administration of securities, administration of loans and credit guarantees by a person or organization other than the lender.
8%	reduced	cleaning in private households, minor repairs of bicycles, footwear, leather goods, clothing, and household textiles, hairdressing, district heating, natural gas, electricity, firewood, liquefied gas, cut flowers and decorative plants, certain works of art and antiques.
3%	reduced	food products, non-alcoholic beverages, children’s clothing and footwear, water supply articles, some pharmaceutical products, certain medical devices for people with disabilities, domestic passenger transport, some books (including e-books), some newspapers and magazines, admission to cultural events and amusement parks, certain types of paid/cable television, agricultural products (excluding pesticides), accommodation in hotels; restaurants (excluding alcoholic beverages), takeaway food, bars, cafes, and nightclubs, cut flowers and plants intended for food production, certain supplies of new buildings; some construction work related to new buildings, admission to sports events; use of sports facilities, funeral and cremation services, household waste disposal, some telephone services, some writing and composing services (royalties), raw wool, waste and sewage processing, some goods and services intended for consumption on board passenger transportation vehicles, some works of art, collectibles, and antiques,
0%	zero	intra-Community and international transportation.

Five different VAT rates also apply in Italy, Ireland, and France. Read our articles to learn more.

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Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
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