VAT compliance and reporting rules in Luxembourg 2024
Below is summary of the major rules provided under Luxembourg VAT rules (Loi sur la TVA du 12 Février 1979 modifié), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.
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Luxembourg VAT country guide
| Highlights | Local term | Taxe sur la valeur ajoutée (TVA) |
| VAT Rates - standard | 17% VAT since 1 Jan 2024 | |
| VAT Rates - reduced | 14%; 8%; 3%; 0% | |
| VAT number format | LU 12345678 | |
| Registration threshold | €35,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. | |
| VAT Group | Permitted | |
| VAT recovery foreign businesses | Permitted. Non-EU businesses only if reciprocity agreement with Luxembourg | |
| Fiscal Representative | Not required | |
| Currency | Euro €, January 1999 | |
| Administration | Introduction | Luxembourg introduced VAT in 1970. It is a founding member of the European Union. |
| VAT laws | Loi sur la TVA du 12 Février 1979 modifié. Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | Administration de l’Enregistrement, des Domaines et de la TVA. Luxembourg X office deals with non-residents. Tax office is part of Ministry of Finance. | |
| VAT Rates | Standard rate | 17% VAT since 1 Jan 2024 |
| Reduced rates | 14%: Limited financial services; wine fermentation; cleaning products. 8%: flowers; domestic fuels; electricity; motor fuel 3%. 3%: basic foodstuffs; cultural event entrance; passenger transport; restaurant services medical equipment; children's clothing; copyright; certain agricultural inputs; books and journals; domestic energy sources; certain labour intensive services (hairdressing and domestic cleaning services) | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft | |
| Exempt | Education; financial services; independent Director fees; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | Goods at time of switch of control (eg delivery); Services at performance. May be postponed to invoice date which is set at latest by 15th of following month. Advance payments result in VAT tax point. However, not for intra-community acquisitions when excluded from consideration. This is then adjusted through invoice which due by 15th of month following acquisition. |
| Reverse Charge | At time of supply. But at least by 15th of the following month on intra-community supplies. | |
| Continuous Services | Per contract or latest end of calendar year of provision. | |
| Imports | At point of clearance into Luxembourg after customs or exit from bonded warehouse. Postponed VAT accounting permitted (see separate) | |
| Goods on approval and return | General rule - only when customer acknowledges full acceptance on goods. | |
| Registration | VAT registration threshold | €35,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. |
| Voluntary VAT registration | Permitted for resident businesses | |
| VAT number format | ||
| VAT Group | Permitted by two or more linked Luxembourg resident businesses. Must share economic/organisational/ownership ties. Holding companies without taxable income may join. | |
| Non-residents | No additional requirements. No registration threshold. No Fiscal Representative required. | |
| Fiscal Representative | Not required for non-residents. May be used by non-residents to import goods without triggering the need to VAT register. Tax office retains right to demand a bank guarantee from non-EU businesses, but rarely imposes. | |
| Digital Services | Luxembourg participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Not recoverable | |
| VAT Invoices | Issuance | Must be issued latest 15th of the month following the time of supply. Consideration advances must be invoiced at time of cash receipt. Retail invoices not required unless customer requests. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | Permitted with agreement of customer. In accordance with EU e-invoice Directive EU Directive 2010/ 45/EU | |
| Simplified invoices | Permitted for transactions not exceeding €100. Can exclude customer details and does not need to break out VAT (although must be determined with rate or other) | |
| Self-billing | Permitted by written agreement between both parties. The supplier must be able to formally 'accept' each invoice. | |
| Retention of invoices | Ten years. Paper invoices may be digitised. Paper invoices must be retained in Luxembourg | |
| FX rules | Invoices may be issued in any currency, but the VAT amount due must be shown in €. FX rate of ECB, commercial bank or Luxembourg Central Bank may be applied | |
| Invoice corrections | Credit notes may be used to adjust VAT amount, but must include invoice number of original invoice and explanation for change. There is no specific guidance. | |
| Compliance | Right to deduct | Excluded: no business-related expenditure non-recoverable. This may include luxury items and spend on some entertainment |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Luxembourg without triggering a VAT registration and supply for a non-Luxembourg supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | Normal reverse charge on cross-border B2B service supplies. No reverse charge on most goods supplies by non-residents - meaning a VAT registration required. Domestic reverse charge on: natural gas and electricity; CO2 emission certificates; computer chips (2024); mobile phones; laptops; precious metals; games consoles | |
| Cash discounts | If a cash discount is taken-up after a sale, the VAT is adjusted without the need for a credit note - supporting documentation will suffice | |
| Bad debt relief | Generally permitted after two years since debt due. Otherwise if supplier can demonstrate customer will not pay following legal proceedings, reminders etc | |
| Import VAT deferment | Permitted without special application or licence. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. | |
| VAT warehouse | Permitted for the holding, reworking and sale of goods under VAT-exempt terms. Only permitted for pre-certified importers or with fiscal representative. Bonded warehouses also in operation. | |
| Supply & install | Non-residents providing an instal service with goods may not use the reverse charge. They must therefore VAT register. | |
| Use and enjoyment services | Introduced for telecoms, broadcast and electronic services. Also transport of goods and related services. | |
| Capital goods adjustment period | Movable property: five years. Immovable property: ten years | |
| Non-residents VAT recovery | EU businesses may apply for Luxembourg VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. Non-EU businesses must submit an annual-only electronic claim with supporting invoices via the Luxembourg authorities directly (13th Directive). Luxembourg does require a reciprocal agreement with the country of residence of the claimant. Non-EU businesses do not have to appoint an Luxembourg resident Fiscal Representative for the reclaim process | |
| VAT on Digital Services | Luxembourg follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Luxembourg VAT must be charged on all sales by non-Luxembourg EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Luxembourg sales VAT with IOSS return option | |
| Cash accounting scheme | Available for resident businesses with annual turnover not exceeding €500k per annum | |
| VAT registered cash tills | N/a | |
| Statute of limitations | Five years | |
| Other | N/a | |
| VAT Returns | Frequency | Monthly. Quarterly returns for turnover between €112k and €620k pa. Both monthly and quarterly filers must also file an annual summary return. Annual returns only if below €112k. |
| Filing method | Electronic only via 'eTVA' portal | |
| Deadlines (inc payments) | Returns and any VAT payments due by 15th of the month following the reporting month or quarter. Annual filers 1 March. Annual summary return by 1 May of following year. Automatic deadline extensions for filings (not payments) on offer | |
| VAT credits | Credits are usually rolled over to the next VAT return. However, it is possible to apply for a refund. | |
| Corrections | Via corrective return and subject to penalties (see separate). Although minor adjustments may be filed via annual summary return. | |
| Non-residents | Permitted. No Fiscal Representative required for non-EU businesses - although tax office has right to impose direct bank guarantee. | |
| Other filings | Monthly European Sales Listing for goods and services supplies 15th of month following. ESL's may be filed quarterly if reported values do not exceed €50,000 in goods in prior four quarters. Services-only filers may opt for quarterly ESLs. Intrastat monthly by the 16th of the following month for supply of goods above threshold: dispatches: €200k; arrivals: €250k. | |
| SAF-T | Luxembourg SAF-T FAIA obligations | |
| Penalties & interest | €250 to €10k for missed return depending on reason. Interest penalties between 10% and 15% pa of VAT due for missed payment or incorrectly reported VAT liabilities. | |
| B2C Distance Selling returns | Luxembourg participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
