VAT Luxembourg - Reduction of VAT Rates 2023
The Luxembourg government announced an amendment to the VAT law. The amendment consists of a temporary reduction of VAT rates by 1% in 2023. The reduction was effective as of January 1, 2023 and expired on December 31, 2023. This change concerned the standard, intermediate and reduced VAT rates. The super-reduced VAT rate remained unchanged (3%).
Do you have taxable activities in Luxembourg? Do you use fuel for professional purposes? If so, we invite you to read this article to find out what changes in VAT rates and fuel prices were planned for the year 2023 and we will update new changes for 2025.
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- Reading Time : 7 min.
- Updated: 15/12/2023
VAT Luxembourg: Rates in 2023 - what did they look like after the revision?
In order to respond to soaring prices, the government has decided to temporarily lower the VAT rates for the year 2023 (from January 1 to December 31):
- Standard rate: 16% (until now 17%)
- Intermediate rate: 13% (until now 14%)
- Reduced rate: 7% (until now 8%)
The super reduced VAT rate of 3% remains unchanged.
VAT rates in Luxembourg returned to their normal level in 2024, so from January 1, 2024, the standard VAT rates are:
⇒ Standard rate – 17%
⇒ Intermediate rate – 14%
⇒ Reduced rate – 8%
⇒ Super-reduced rate – 3% (unchanged)
If you are wondering which VAT rate to use for your product, check out our article where we give you links to official sources to check the VAT rate in Benelux countires: How to check VAT rate and customs code in Benelux?
VAT Luxembourg: Reduction of prices of petrol products
The law also included information on the temporary reduction in the price of certain petrol products. This has been enabled by the financial compensation proposed by the Luxembourg government. Initially, the reduction was valid until 31 August 2022, but the amendment introduces a further extension until 31 December 2023.
Click here to read everything you need to know about VAT in Luxembourg : VAT Returns, Listing Clients, Tax Agent etc.
The reduced prices applied to diesel and liquefied petroleum gas used as fuel. They applied to all sales of petroleum products from the time they are introduced to the market until they are sold to the end customer. The price of diesel used as fuel is 0.15 euro per liter, and the price of liquefied petroleum gas is 0.20 euro per kilogram. The prices included all taxes.
VAT Luxembourg: Which deliveries of petroleum products were subjected to price reduction?
The law also specifies which deliveries of petroleum products were subjected to the price reduction. It stated that it applied only to customers who use petroleum products as fuel for industrial and commercial purposes, as well as for agricultural, horticultural, fish farming and forestry work.
VAT changes in 2025
A number of significant VAT adjustments will go into effect on January 1, 2025:
→ Increase in VAT exemption threshold – from €35,000 to €50,000, the yearly turnover threshold will be raised for VAT exemption.
→ Cross-border VAT exemption – small enterprises with annual sales under €100,000 in the EU are eligible for VAT exemptions in several EU nations.
→ New VAT regulations for virtual events – the consumer’s location will now be the site of taxes.
→ Extended reduced VAT for art market – the importation, intra-EU purchase, and sale of artwork, antiques, and collectibles will all be subject to the reduced VAT rate.
Get in touch with our Eurofiscalis Benelux Team
Rising VAT rockstar at Eurofiscalis I have a passion for unraveling the complexities of VAT regulations in the European Union (especially Benelux region). My mission is to empower readers to navigate the ever-changing VAT landscape with ease and to answer your questions in a clear and concise way.
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