VAT in Luxembourg: Complete Guide
Welcome to the Complete Guide to VAT in Luxembourg! If you are a business owner, entrepreneur, or simply interested in understanding the value-added tax (VAT) system in Luxembourg, you’ve come to the right place. This comprehensive article will provide you with all the essential information you need to navigate the intricacies of VAT in the Grand Duchy of Luxembourg.
With its prosperous economy and favorable business climate, Luxembourg has emerged as a thriving hub for international trade and commerce. As a member of the European Union (EU), Luxembourg follows the EU VAT framework, which includes common VAT rules and regulations applicable across member states. However, it is essential to recognize the unique aspects of VAT in Luxembourg.
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VAT in Luxembourg : VAT Rates
In Luxembourg, Value Added Tax (VAT) is calculated based on the taxable amount and is subject to different rates depending on the nature of the transaction. The applicable VAT rates vary according to the type of goods or services being supplied.
Applicable VAT Rates in Luxembourg
At present, there are 4 VAT rates applicable in Luxembourg (2023) :
| Rate | Type | Goods / Services |
|---|---|---|
| 16% | Standard | Most goods and services. |
| 13% | Intermediate | Applies, among other things, to : certain types of wine, certain types of fuel and energy products, advertising brochures, management of credit guarantees. |
| 7% | Reduced | Applies, among other things, to : certain types of energy (such as electricity and gas), sales of flowers or other floral products, bicycle repair services, services related to the mending of footwear products, tailoring services related to the mending of clothing and underwear, cleaning and housekeeping services, hairdressing services. |
| 3% | Super reduced | Applies, among other things, to : food products, medicines and pharmaceuticals, books, magazines and newspapers, children's clothing and footwear, restaurant and catering services, tickets to cultural events, car seats for children and many more |
The above rates apply only in the year 2023 as the Luxembourg government has decided to lower VAT rates for this year. To read more about it, check out our article on the subject : Temporary reduction of VAT Rates in Luxembourg.
Taking into account even the regular VAT rates, Luxembourg remains to be the country that applies the lowest VAT rates in the whole European Union.
How to check the VAT Rate for your product in Luxembourg
You are unsure which VAT rate applies to your products ? Do not worry as there is an easy and reliable way to check it on the official website of the Luxembourg administration.
More details can be found here: How to check VAT rate in Benelux.
When to register to VAT in Luxembourg?
When expanding your business to Luxembourg, you might need to get a Luxembourg VAT number and start paying taxes in Luxembourg. However it is not always necessary.
Below you will find a list of different situations that require you to register to VAT in Luxembourg:
- Conducting Intra-community Acquisitions or Intra-community Sales on the territory of Luxembourg
- Using a warehouse on the territory of Luxembourg
- Selling goods to consumers in Luxembourg, after reaching the yearly threshold of EU Sales of 10 000 € (does not apply if you use the OSS procedure)
- Construction work on the territory of Luxembourg
- Organizing events or fairs on the territory of Luxembourg
These are some of the situations when it is necessary for you to register to VAT in Luxembourg.
We know that each business is different so we are happy to thoroughly analyze your business transactions and let you know if in your case the registration to VAT in Luxembourg is really needed.
How to register to VAT in Luxembourg?
In order for non-resident foreign companies to register for Luxembourg VAT, they must first furnish evidence of their activity in Luxembourg, along with proper identification. The Administration de l’Enregistrement des Domaines et de la TVA (AED) requires this proof before issuing a Luxembourg VAT identification number. The taxable person must provide undeniable evidence that they will engage in operations in the near future that necessitate a VAT number.
Acceptable forms of proof may include: a contract, an order form, a rental agreement for a warehouse (if applicable for a distribution center), an import document, a transportation document, an invoice, or evidence of a merger or business acquisition.
The Luxembourg tax authorities additionally request the following documents:
- An extract from the trade register of the country where the taxable entity originates.
- A VAT certificate issued in the country of origin.
- The Act of Incorporation of the company.
- A copy of the identity card of the managing director.
- A Power of Attorney document between Eurofiscalis Benelux and the foreign company.
- Proof of activity in Luxembourg.
- Bank details
Schedule a free consultation with our VAT expert to establish your needs based on your situation.
VAT Obligations in Luxembourg
Once registered to VAT in Luxembourg, there are a few things that you need to remember about to ensure your VAT compliance. In order to comply to VAT in Luxembourg there are certain obligations that a taxable person in Luxembourg has:
- Businesses are required to inform the AED (L'Administration de l'enregistrement, des domaines et de la TVA) when they start, change, or cease their activities, and they must also inform the authority of any subsequent changes.
- They must ensure that an invoice is issued for the delivery of goods and services to another taxable person or a non-taxable legal entity, either by themselves or on their behalf and in their name, by their customer or a third party. This includes invoices for deposits received before the goods are delivered or services are provided.
- Copies of all invoices, whether issued by themselves or by their customer/third party on their behalf, as well as all invoices received, should be archived for a period of 10 years from the date of issuance.
- If applicable, businesses must periodically declare and pay the taxes that are due.
- For each tax period corresponding to the calendar year, they are required to file an annual declaration.
- Proper accounts must be maintained in sufficient detail to facilitate the application of the tax and to allow for checks by the AED. These accounts should include a clear breakdown of the data required for the declarations that the taxable person must file according to the VAT law.
- Every VAT-registered individual or business within the country is generally required to prepare and submit a summary statement on a monthly basis. This statement should include a list of individuals or businesses who are VAT-registered in another European Union (EU) Member State and to whom they have made an intra-Community supply of good or provided services, excluding VAT-exempt services, in an EU Member State where the transaction is subject to VAT and the buyer is liable for VAT.
To read more about VAT obligations check out what the Luxembourg administration has to say about it : Value Added Tax (VAT)
VAT Return in Luxembourg
The Luxembourg VAT return serves as a tax form that aims to notify the Luxembourg VAT administration about your taxable activities within Luxembourg’s jurisdiction. It is mandatory for individuals or entities possessing an active Luxembourg intra-Community VAT number and can be submitted monthly, quarterly, or annually, depending on the preferred declaration periodicity selected during VAT registration in Luxembourg.
Typically, the deadline for submitting the VAT declaration and making the VAT payment (if applicable) in Luxembourg is the 15th day of the month following the end of your declaration period.
The VAT return in Luxembourg must be filed electronically via the eCDF portal.
VAT in Luxembourg: Declaration Periodicity
In Luxembourg, the reporting rhythm for VAT declarations is structured as follows:
| Timeframe for VAT Returns | |||
|---|---|---|---|
| Turnover | < 112 000 € | > 112 000 € < 620 000 € | > 620 000€ |
| Frequency | Annual VAT Return | Quarterly and annual VAT Return | Monthly and annual VAT Return |
VAT payment in Luxembourg
If you have submitted a VAT return in Luxembourg and are required to pay VAT to the Luxembourg VAT authorities, here are the bank details where you should make your VAT payment:
General Luxembourg VAT Payment Details
Account number (IBAN): LU35 0019 5655 0668 3000
BIC : BCEELULL
Mandatory reference: Registration number mentioned on your VAT identification card + reporting period concerned by the payment (XXXXXXXXXXX “EA”AAMM or TT or AA)
Amount of VAT to be paid: Amount mentioned in box 105 of your VAT return
Please note that your VAT payment must be received by the deadline specified for submitting the VAT return, which is typically the 15th day of the month following your reporting period. The exact date of the payment deadline can be found on the initial page of the website www.aed.public.lu. However, it is important to note that this information is provided for reference purposes only and is not guaranteed. The definitive and authoritative guidelines are governed by the applicable legal provisions.
VAT refund in Luxembourg
If you have submitted a VAT return in Luxembourg and you have a credit balance or a negative amount in box 105, indicating that you are entitled to VAT recovery, the process for recovering your deductible VAT is as follows:
- The amount of VAT to be recovered should correspond to the figure specified in box 105 of your Luxembourg VAT return.
- After filing your Luxembourg VAT return on the eCDF portal, the excess input VAT amount will be automatically considered for refund
- The refund will be transferred to the bank account that you have previously provided to the Luxembourg VAT authorities.
It is important to ensure that your VAT return is accurately completed and filed on time to initiate the refund process.
The refund of the surplus VAT amount follows these guidelines in Luxembourg:
- Monthly Refund: If the surplus amount is equal to or exceeds €1,200, the refund is typically processed on a monthly basis.
- Annual Refund: If the surplus amount is less than €1,200 but still exceeds €2.40, the refund is processed annually.
Please note that the refund will only be initiated if you have fulfilled all your VAT obligations. Additionally, the refund process usually takes around 2 to 3 months for the VAT credit to be reimbursed to the bank account you provided during your Luxembourg VAT registration.
Annual Listing Declaration in Luxembourg
The annual return in Luxembourg functions similarly to the regular Luxembourg VAT return. It is a mandatory tax return that serves to inform the Luxembourg VAT administration about your taxable activities within Luxembourg throughout the entire fiscal year. It is applicable to all individuals or entities holding an active Luxembourg intra-Community VAT number.
There are two types of annual declarations in Luxembourg, which must be filed based on your chosen reporting frequency:
- Regular Annual Declaration: If you follow an annual reporting rhythm (with a yearly turnover of less than €120,000), this VAT return will be the sole return you need to file during the fiscal year.
- Annual Recapitulative Declaration: If you follow a quarterly reporting rhythm (with an annual turnover exceeding €120,000 but less than €620,000) or a monthly reporting rhythm (with an annual turnover exceeding €620,000), this VAT return will summarize all the amounts reported in your periodic VAT returns filed throughout the same fiscal year.
It is important to adhere to the appropriate reporting rhythm and fulfill your obligations by submitting the necessary annual declarations based on your turnover and reporting frequency.
To learn more about the Annual Return in Luxembourg click here : Annual Return Luxembourg
Recapitulative statement in Luxembourg
The recapitulative statement in Luxembourg is a required declaration that lists all the intra-Community sales you have made during your specified reporting period. This statement includes only the transactions involving customers who are identified for VAT purposes in another member state of the European Union.
The filing of the recapitulative statement is compulsory for individuals or entities holding an active Luxembourg intra-Community VAT number. Specifically, it applies to those who have reported an amount in the VAT grid 457 of their Luxembourg VAT return. The frequency of filing the recapitulative statement aligns with the periodicity of submitting your VAT returns.
To comply with your VAT obligations, ensure that you accurately report your intra-Community sales in the recapitulative statement according to the reporting periodicity.
The deadline for submitting the recapitulative statement is the same as for the VAT return so the 15th of the month following the declaration period.
To learn more about the recapitulative statement in Luxembourg click here: Recapitulative Statement Luxembourg
Intrastat Declaration in Luxembourg
The Intrastat declaration in Luxembourg is a statistical declaration that serves the purpose of informing not only the Luxembourg VAT administration but also the VAT administrations of all 27 European Union countries about your intra-Community transactions conducted within Luxembourg.
It is mandatory for individuals or entities holding an active Luxembourg intra-Community VAT number, provided they have surpassed the following thresholds:
- Arrivals : 200 000€*
- Dispatches: 150 000€*
*updated for 2023
Once any of these thresholds are met, it is mandatory to submit a monthly Intrastat declaration in Luxembourg. The Intrastat declaration must be filed electronically by the 16th of the month following the activities conducted (or by the 6th of the following month if submitted on paper).
Even if your company has not engaged in any intra-Community transactions during a specific month, it is still necessary to submit a NIL Intrastat declaration, indicating that no transactions occurred during that period.
Moreover, in Luxembourg there are different types of Intrastat declarations, depending on the value of the transactions : simplified, detailed and expanded.
To learn more about Intrastat in Luxembourg, feel free to check out our dedicated page: Intrastat in Luxembourg.
VAT in Luxembourg for e-commerce companies
If you are an e-commerce company, selling your products to customers located in Luxembourg, it is not always necessary for you to register to VAT in Luxembourg.
For sure you already know, that when you conduct distance selling to physical customers in different EU countries, after reaching the 10 00O € sales in a year, you need to start paying VAT in the country where your consumers are located. However, if you are using the One-Stop-Shop Procedure you can do it without having a VAT number in each of the countries !
There might be situations in which even when using the OSS (One Stop Shop) procedure, you might need to register to VAT in Luxembourg. Here are some of them :
- You are storing (marketplace’s warehouses included) your merchandise on the Luxembourg territory
- You are conducting local sales – selling products from the territory of Luxembourg to customers located in Luxembourg
- Engaging in other type of transactions other then B2C distant sales
You are still not sure if you need to register to VAT in Luxembourg as an e-commerce company ? Don’t hesitate to book a free of charge consultation with our Benelux VAT expert !
Schedule a free consultation with our VAT expert to establish your needs based on your situation.
Occasional and temporary provision of services in Luxembourg
Companies without permanent establishment in Luxembourg but providing occasional services on the territory of Luxembourg might need to notify the Luxembourg administration about their will to undertake providing services and submit a special declaration called “Notification of services”.
For companies established outside the European Economic Area or Swiss Confederation, this is a necessity for all kinds of services provided.
Companies that are established in one of Member States of the European Economic Area or Swiss Confederation, that undertake occasional and temporary commercial, craft, manufacturing or self-employed activities will also need to submit this special notification for occasional services prior to starting their activities.
The only exception are businesses engaged in commercial or liberal professions, such as architects, engineers, chartered accountants, surveyors, patent attorneys, and economic advisors, which require a business permit – they are not required to provide any notification.
This notification needs to be submitted BEFORE starting any work on the territory of Luxembourg. The notification is valid for 12 months and is renewable on a yearly basis.
Eurofiscalis can assist you by submitting the notification to the Luxembourg administration and answer your questions concerning the subject.
To learn more on the subject check out our article: Provision of services in Luxembourg
Do I need a tax agent or a tax representative in Luxembourg?
In Luxembourg, the concept of “Tax Representation” is not relevant. The only form of representation available is for customs-related matters. When it comes to VAT, we only speak of “Tax Agent”.
While it is not obligatory to appoint a tax agent for handling declaration obligations in Luxembourg, it is advisable for non-resident taxpayers to do so. Engaging a tax agent helps ensure the proper filing of VAT returns and maintains uninterrupted communication and processes with the Luxembourg tax authorities.
- Both European and non-European companies have the option to appoint a tax agent.
- You have the choice to either communicate directly with the Luxembourg tax authorities or designate a tax agent to handle the process.
- By appointing a tax agent, you can ensure the proper filing and ongoing management of your VAT obligations in Luxembourg.
When registering for Luxembourg VAT, appointing a tax agent allows them to handle tasks such as VAT returns, Intrastat, EC Sales List, and DES. Additionally, the tax agent can act as your representative in communications with the Luxembourg tax authorities.
So to answer the question, you do not need a tax agent in Luxembourg, however there are many advantages to having one ! Do not hesitate to get in touch with us and grow your business in Luxembourg without worrying about VAT compliance.
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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