VAT GUIDE IN LUXEMBOURG
LUXEMBOURGUISH VAT GUIDE FOR BUSINESSES
VAT in Luxembourg is a consumption tax applied to most goods and services at each stage of the supply chain, from production to final sale. Luxembourg operates its VAT system in line with the EU VAT Directive, ensuring harmonization with other EU Member States while maintaining its own rates and specific rules. The country is known for having the lowest standard VAT rate in the EU.
VAT is administered by the Administration de l’Enregistrement, des Domaines et de la TVA (AED), which oversees registration, reporting, and compliance. Businesses making taxable supplies in Luxembourg are generally required to register for VAT, issue compliant invoices, and file periodic returns, either monthly, quarterly, or annually depending on their turnover.
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VAT Rates
Who Needs to Register for VAT?
In Luxembourg, a taxable person is any business or individual conducting economic activities independently and regularly. This includes supplies of goods/services and intra-Community acquisitions. Nontaxable legal persons registered for VAT are treated as taxable persons for cross-border services, requiring them to self-assess VAT under the reverse charge.
There is no VAT registration threshold—businesses must notify the VAT authorities upon starting activity.
Distance sales have no Luxembourg-specific threshold; VAT is due in the destination country, reportable via the One-Stop Shop (OSS), with a €10,000 EU-wide threshold for small cross-border sales by single-Member-State suppliers.
Non-established businesses must register if they make taxable supplies not covered by reverse charge, such as intra-Community supplies/acquisitions, distance sales, or direct supplies to private persons.
Tax representatives are not allowed for EU businesses. Non-EU businesses may be required to provide a security deposit to cover VAT liabilities.
VAT Obligations
VAT invoices
In Luxembourg, taxable persons are generally required to issue a VAT invoice for all taxable supplies, including exports and intra-Community supplies made to other taxable persons or to nontaxable legal entities. For retail sales to private individuals, issuing an invoice is not mandatory unless the transaction is a distance sale or the customer specifically requests one.
A VAT invoice is necessary to substantiate a claim for input tax deduction or for obtaining a VAT refund under the EU Directive 2008/9/EC or the EU 13th Directive refund procedures.
In Luxembourg, simplified VAT invoices may be issued only when the total invoice amount, including VAT, does not exceed EUR100. Certain exceptions apply, such as self-billing, where simplified invoices are not permitted.
Records
In Luxembourg, VAT records (e.g., general ledger, invoices, consignment stock registers, transport documents, agreements) must generally be kept in hard copy within the country, unless electronically archived within the EU. Records must be retained for 10 years. Electronic storage is permitted if authenticity and integrity are ensured, and the storage location must be reported in the annual VAT return.
VAT Deadlines
Periodic returns – In Luxembourg, VAT returns are generally filed monthly.
Taxable persons with annual turnover up to EUR 112,000 may file only one annual return for the calendar year, due 1 March of the following year.
Those with turnover between EUR 112,000 and EUR 620,000 may file quarterly returns plus an annual recapitulative return. Quarterly returns are due by the 15th day of the month following the end of the quarter, while the annual return is due 1 May.
Taxable persons exceeding EUR 620,000 must submit monthly returns and an annual recapitulative return, with the same deadlines as above.
Automatic filing extensions apply—two months for periodic returns and eight months for annual returns—but only for submission, not for payment. Provisional VAT payments may still be required within the legal deadlines.
Taxable persons engaged solely in transactions with no input tax recovery rights are generally not required to register for VAT, unless they are liable to self-assess Luxembourg VAT on services from abroad or make intra-Community acquisitions. In such cases, registration usually entails filing annual returns, due 1 March (with an automatic eight-month extension).
Periodic payments – VAT due from periodic returns must be paid by the 15th of the following month. For annual returns, payments are due by 1 March (for single/simplified returns) or 1 May (for recapitulative returns). Payments must be made via bank transfer to the tax authorities, quoting the taxpayer’s matricule number (different from the VAT number) and the relevant return reference.
Electronic filing – All VAT returns, both periodic and annual, as well as EC sales listings, must be filed electronically via the Luxembourg tax administration’s eTVA portal.
VAT Refund
Businesses not established or registered for VAT in Luxembourg can reclaim Luxembourg VAT under specific procedures. They cannot register solely to recover VAT.
EU Businesses: Refunds follow EU Directive 2008/9/EC; claims are filed via the electronic portal of the claimant’s home Member State and only if no taxable supplies were made in Luxembourg (except reverse charge supplies).
Non-EU Businesses: Refunds follow the EU 13th Directive. No reciprocity requirement applies.
The deadlineis June 30 of the year following the one in which VAT was incurred.
Claim period is 1 year with a minimum claim of EUR 250. It must be in English, French, or German and include supporting documents.
Claims are sent to the Luxembourg VAT authority.
No interest is paid on late refunds.
Penalties for non-compliance
Late Registration
Fine between EUR 250–10,000.
Late Payment / Filing
Monthly or quarterly returns: EUR 250–10,000.
Annual returns: EUR 250–10,000.
Intrastat
Late, missing, or inaccurate filings: generally EUR 500 (range: EUR 251–2,500).
EC Sales Lists (ESLs) – Late, missing, or inaccurate filings: EUR 250–10,000.
Errors & Non-Compliance
Fines for incorrect invoices, late or inaccurate returns: EUR 250–10,000.
Failure to provide FAIA file if requested: up to EUR 25,000 per day.
No specific penalty for failing to update VAT registration details.
Fraud
Managers may be personally liable for unpaid VAT in case of blameworthy non-compliance.
Fraudulent VAT evasion or improper refund claims: penalty up to 50% of evaded VAT.
Common VAT Terms
- VAT – TVA (Taxe sur la valeur ajoutée)
- Taxable person – Assujetti
- Input tax – Taxe en amont
- Output tax – Taxe en aval
- VAT return – Déclaration TVA
- VAT rate – Taux de TVA
- Exemption – Exonération
- Intra-Community supply – Livraison intracommunautaire
- Intra-Community acquisition – Acquisition intracommunautaire
- Reverse charge – Autoliquidation
- Distance sales – Ventes à distance
- Tax representative – Représentant fiscal
- VAT number – Numéro de TVA
- Credit note – Note de crédit
- Debit note – Note de débit
- Simplified invoice – Facture simplifiée
- Full invoice – Facture complète
- Late payment interest – Intérêts de retard
- Penalty – Amende
