VAT Luxembourg - Reduction of VAT Rates
The Luxembourg government has announced an amendment to the VAT law. The amendment consists of a temporary reduction of VAT rates by 1%. The reduction will be effective as of January 1, 2023 and is expected to expire on December 31, 2023. This change concerns the standard, intermediate and reduced VAT rates. The super-reduced VAT rate remains 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 are planned for the year 2023.
- Posted : 01/18/2023
- Reading Time : 7 min.
VAT Luxembourg: New rates - what do 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 will return to their normal level in 2024.
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 includes 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 apply to diesel and liquefied petroleum gas used as fuel. They apply 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 include all taxes.
VAT Luxembourg: Which deliveries of petroleum products are subject to price reduction?
The law also specifies which deliveries of petroleum products are subject to the price reduction. It states that it applies 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.
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