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News & Tips

VAT rates increase [News 01/01/2015]

New VAT rates applicable since 01/01/2015:

  • The standard rate from 15% to 17%
  • The intermediary rate from 12% to 14%;
  • The reduced rate from 6% to 8%;
  • The super-reduced rate remains unchanged at 3%.

 

DOING BUSINESS IN LUXEMBOURG [LU] - VAT GUIDE

 

General

VAT Directive

Luxembourg

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

Luxembourg VAT numbers have 10 characters [LU + 8 digits].

 

What is the local name of the tax?

 

Taxe sur la Valeur Ajoutée [TVA]

 

VAT rate

VAT Directive

Luxembourg

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Luxembourg applies a standard VAT rate of 17% and three reduced VAT rates: 3%, 8% and 14%.

See VAT rates applied in the EU.  

VAT return

VAT Directive

Luxembourg

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Quarterly/Yearly

Your company has to report its VAT position by filing periodical VAT returns either every month, every quarter or every year depending on your annual turnover of the preceding year.  

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Periodical VAT returns must be filed by electronic means to Luxembourg VAT authorities before the 15th day of the month [15 of N+1] following the tax period. Annual return is due by February 28th.

Statement

VAT Directive

Luxembourg

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company is required to file an annual VAT return.

The Statement should be filed before April 30th of the next year.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative statement [ESL] must be drawn up for each calendar month.

Taxpayers can however opt for filing the statement on a quarterly basis provided the threshold of € 50.000 is not exceeded.

The statement has to be filed by electronic means before the 25th day of the month following the reporting period [month/quarter] to which it relates.

Payment

VAT Directive

Luxembourg

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The VAT due should be paid by filing deadline for the VAT return to which it relates. 

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required.

VAT refund

VAT Directive

Luxembourg

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

 A VAT credit is in principle automatically carried forward to the next period, unless a tax refund has been applied for. 

Special measures for foreign companies

VAT Directive

Luxembourg

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Reverse charge does basically not apply to supplies of goods carried out by suppliers not established in Luxembourg.

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider. 

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Reverse charge does basically not apply to supplies of services carried out by suppliers not established in Luxembourg.

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

No

No simplification measures are available for consignment stock.

Foreign taxpayers are therefore required to be registered for VAT purposes in Luxembourg.

 

Do special arrangements apply to "call-off-stock"?

 

No

No simplification measures are available for call-off-stock.

Foreign taxpayers are therefore required to be registered for VAT purposes in Luxembourg.

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation simplification measures cannot be applied even if the middleman B is VAT registered as a non-established company in Belgium [Member State C].

 

VAT on import

VAT Directive

Luxembourg

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Luxembourg has introduced a VAT warehousing regime.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

Postponed accounting via the VAT return is possible. 

 

Miscellaneous

VAT Directive

Luxembourg

Intrastat Threshold  

Dispatches: € 150.000

Arrivals : € 200.000

Distance Sales - Threshold  

€ 100.000

See various thresholds applied in the EU

Ministry of Finance   website

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