As announced in the Draft Budget Law, Luxembourg's VAT rates increased by 2% on 1 January 2015 to 8% for the reduced rate (i.e. for electricity and gas), 14% for the intermediary rate (i.e. for management and safekeeping of securities) and 17% for the standard rate.
The super-reduced rate of 3% (i.e. for books and food) remains unchanged, but the application of the rate is revised in some points - for example, the standard VAT rate is now applicable for alcoholic beverages in restaurants.
The place of taxation of electronically supplied services, radio and broadcasting and telecommunication services provided to EU private customers will shift to the country of residency of the customer. In addition the definition of the telecommunication services as per EU VAT directive is introduced in the Luxembourg VAT law.
The derogation from the standard regime of monthly filing of VAT returns, to quarterly or annual filing, will be bound to the following conditions:
- the filing and payment obligations are met
- there are no serious, precise and consistent indications of breach.
A new VAT refund procedure was also implemented on 1 January. For VAT registered companies who are in a receivable position to the VAT authorities based on the filing of periodical VAT returns, the receivable balance is rolled over to the following periods unless the taxpayer files a written refund request. The VAT authorities will be bound to deadlines to refund or to request additional information. If the deadlines are not respected by the authorities interest payments in favour of the taxpayer become due.
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