VAT Luxembourg Guide
Read our guide and find out everything you need to know about VAT in Luxembourg, from registration to filing, and more.
Are you considering expanding your business into Luxembourg? Then understanding the Luxembourg VAT system will be essential. Our guide provides a thorough rundown of the Luxembourg VAT rates, the obligations for registration, and compliance details you’ll need to confidently venture into the Luxembourg market.
What is the Luxembourg VAT rate?
In Luxembourg, VAT is known as ‘Taxe sur la Valeur Ajoutée’ (TVA). The Luxembourg VAT framework offers several tax rates depending on the goods or services in question. The standard Luxembourg VAT rate is 17%, with reduced rates of 14%, 8%, and 3%. Below is a summary of the current Luxembourg VAT rates:
Registering for VAT in Luxembourg
For resident companies, the VAT registration threshold in Luxembourg is set at €35,000 (nil for non-resident companies). Businesses exceeding this annual turnover must register for VAT.
As of July 1, 2021, the distance-selling threshold across EU member states is €10,000. If your company’s cross-border sales with any EU country exceed this amount, you must register for VAT in Luxembourg. VAT registration is also required if you hold stock in Luxembourg or participate in fulfillment services such as Amazon's FBA (Fulfilled-by-Amazon) which includes Luxembourg.
To register, you must submit the necessary forms, available in French, German, or English, to the Luxembourg tax authority. Upon submission, you should expect to receive your Luxembourg VAT number within three weeks.
Fiscal representation in Luxembourg
Non-EU businesses selling in Luxembourg are not required to appoint a fiscal representative, although the tax authorities may request a bank guarantee or cash deposit.
Luxembourg VAT return filing and penalties
Luxembourg VAT returns must be filed electronically via the eTVA portal. The frequency of filing depends on the annual turnover:
Monthly VAT return for businesses with an annual turnover exceeding €620,000,
Quarterly VAT return for businesses with an annual turnover of between €112,000 and €620,000.
Annual VAT return for businesses with an annual turnover of below €112,000.
The deadline for VAT payments and return filings is the 15th of the month following the taxable period. For the annual VAT return, the deadline falls on May 1 of the following year.
Late submission of a Luxembourg VAT return can incur a penalty of €250 to €10,000 depending on the severity of the infringement, while late payment of VAT may result in a penalty of 10% to 15% pa on the due amount.
Luxembourg Intrastat declarations
Companies trading goods in Luxembourg must submit Intrastat declarations if their sales exceed the threshold of €250,000 for arrivals and €200,000 for dispatches. Intrastat returns should be filed monthly by the 16th of the month following the reporting period. Failure to submit an Inrastat return may result in fines of €251 to €2,500.
Reverse charge in Luxembourg
The reverse charge mechanism in Luxembourg shifts the VAT payment responsibility from the supplier to the recipient. It is most commonly applied to services provided by non-resident businesses and for intra-community acquisitions.