VAT in Luxembourg

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Luxembourg VAT

Luxembourg comes under the EU VAT regime, and is part of the EU single market economy. VAT Directives are issued by the EU which lay out the principles of the VAT regime to be adopted by the member states. These Directives take precedent over the local legislation.

Luxembourg VAT law

In Luxembourg, VAT law is contained within the General Tax Code. It is administered by the Administration de l'Enregistrement et des Domaines.

Luxembourg VAT registration

Foreign companies may register in Luxembourg for VAT without the need to form a local company; this is known as non-resident VAT trading. There is no threshold in Luxembourg for the registration of non-resident traders; a VAT number must be in place before the commencement of taxable supplies.

There are strict rules on the situations where a registration is permitted. Common scenarios which require a VAT registration in Luxembourg include:

  • importing goods into Luxembourg
  • organising live events, conferences, etc, in Luxembourg
  • holding goods in a warehouse in Luxembourg as stock for resale longer than three months
  • selling goods from Luxembourg to other EU countries
  • distance selling to private individuals in Luxembourg, e.g. internet retailing.

Registering for VAT in Luxembourg generally takes three to four weeks, although this can vary.

Luxembourg VAT compliance

There are detailed rules controlling the recording and processing of transactions in Luxembourg. These include guidelines on:

  • Luxembourg invoice requirements
  • use of the 'reverse charge' procedure
  • foreign currency reporting and translation
  • correcting errors from prior returns
  • credit notes and corrections
  • what accounting records must be maintained.

Luxembourg VAT rates

The standard VAT rate in Luxembourg is 15%, but this will rise in 2015 by 2%. The reduced rates will also rise by 2%. Currently, the reduced rates are 12% and 6%. As of January 2015 these will rise to 14% and 8% respectively.

Luxembourg VAT returns

Companies with a VAT number in Luxembourg must submit periodic returns detailing all taxable supplies (sales) and inputs (costs). VAT returns submitted by non-resident traders in Luxembourg are monthly, quarterly (due 15 days following the reporting period) or annually (1 March the following year). The filing frequency depends on the annual turnover. There is also a requirement to file a recapitulative annual return by 1 May the following year.

Luxembourg Intrastat and EC sales lists

In addition to VAT returns in Luxembourg, companies may be required to submit additional statistical information.

Luxembourg Intrastat lists sales (dispatches) and purchases (acquisitions) within the EU region, and must be filed monthly.

The EC sales lists in Luxembourg, or a recapitulative statement, details customers and the values of sales made to them. It should be submitted on a monthly basis, but could also be quarterly, and there is no threshold for reporting.

Luxembourg VAT refunds

If a foreign company is providing taxable supplies in Luxembourg but is unable to obtain a Luxembourg VAT number, or is incurring Luxembourg VAT on local goods or services, then VAT may be recovered through a VAT reclaim.

All EU-based businesses must submit VAT refund applications through the tax authorities of the applicant’s home country.

View more information on other countries, or find out more about VAT.