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Luxembourg raises VAT to 17% 2015

Luxembourg is to raise its VAT rate from 15% to 17% on 1 January 2015. The principality’s Value Added Tax rate remains the lowest in the European Union – albeit joint lowest with Cyprus.

The following changes are made to the reduced VAT rates:

  • 6% rises to 8%
  • 12% rises to 14%
  • 3% no change

VAT rise due to EU e-services VAT change

The VAT increase is partially needed to meet the loss in revenues with the switch of B2C e-services VAT to the country of residence of the consumer. Currently, it is country of origin, which is largely Luxembourg as headquarters to the likes of Amazon, Google and Microsoft, major providers of digital services to EU consumers.

Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.


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