This guide provides an overview of VAT in Luxembourg, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Luxembourg.
Luxembourg has the lowest standard VAT in the EU at 17%.
Foreign businesses that incur VAT on eligible expenses in Luxembourg may be able to reclaim it.
Doing business in Luxembourg? You’ll need to play by the rules of the Luxembourg VAT Law of February 12, 1979.
Businesses that exceed the threshold must register, while those below it may register voluntarily.
Luxembourg applies VAT on digital services based on the consumer’s location, generally utilizing the OSS system for EU cross-border services.
The following documents would generally need to be submitted for an application to refund VAT in Luxembourg. For refunds under the 8th Directive - invoices for which a refund of VAT in Luxembourg is being claimed and documents for your appointed agent (if applicable - e.g., if you have appointed VAT IT as your agent). For refunds under the 13th Directive - invoices for which a refund of VAT in Luxembourg is being claimed, a valid tax certificate, completed claim form and documents for your appointed agent (if applicable).
It is important to note for an entity to apply for a refund of VAT in Luxembourg, it must not be established in Luxembourg or registered for VAT in Luxembourg (meaning that it must not have a VAT number in Luxembourg or a VAT ID in Luxembourg) and that is must not be making taxable supplies that would be subject to VAT in Luxembourg.
In addition to the Luxembourg standard VAT rate, there are also various reduced rates of VAT in Luxembourg, being 14%, 8% and 3%. Generally expenses for which a refund of VAT in Luxembourg can be applied will be subject to the Luxembourg standard VAT rate except for taxi fares and public transport fares; accommodation; food, drink and restaurant services and certain entertainment expenses, which are all subject to the reduced rate of VAT in Luxembourg of 3%.
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