Luxembourg

When should i VAT register in Luxembourg?

Compulsory Registration

The following must register for VAT:

each person established in Luxembourg who:

• undertakes a taxable activity;
• assumes that their annual turnover will exceed EUR 35,000;
• any person who is not established or domiciled in Luxembourg, but who carries out transactions subject to VAT in Luxembourg such as the occasional and temporary provision of services, including services related to buildings located in Luxembourg and the delivery of goods including their installation or assembly in Luxembourg, which are subject to tax, whatever the amount of their turnover;
• any non-taxable legal person making intra-Community acquisitions of goods for an annual amount in excess of EUR 10,000 excl. tax;
• any taxable person established in Luxembourg who only carries out transactions which are not eligible for a deduction and who purchases and receives services from a taxable person established abroad, services for which the buyer is liable for tax;

any taxable person established in Luxembourg who:

• only carries out transactions which are not eligible for a deduction;
• provides taxable services in another EU Member State for which the buyer is liable for tax;

any person established in Luxembourg who:

• is subject to the agricultural and forestry flat-rate taxation scheme;
• supplies wine, sparkling wine, wood or capital goods for an annual amount in excess of EUR 35,000;

any person established and registered for VAT in another EU Member State who carries out supplies of goods, including the dispatch or transport, to persons not registered for VAT and established or domiciled in Luxembourg, for an annual amount in excess of EUR 100,000. This category of supply of goods is commonly referred to as ‘distance sales’.

Optional Registration

any person who:

• waives the exemption for the supply and rental of immovable property;
• opts for the application of VAT on these transactions.

any person established in Luxembourg with an annual turnover excl. tax of less than EUR 35,000 who wishes to opt for the standard tax scheme;
any taxable person who:

• carries out a fully exempted activity which does not give rise to the deduction of input tax; or
• benefits from the tax exemption for small enterprises or from a flat-rate taxation scheme;
• any non-taxable legal person established in Luxembourg who carries out intra-Community acquisitions of goods for an annual amount excl. tax of less than EUR 10,000 and who opts for taxation in Luxembourg of said acquisitions;

any taxable person established in another EU Member State and registered for VAT who:

• carries out supplies of goods – including dispatch and transport – to persons not registered for VAT (distance selling) and established or domiciled in Luxembourg, for an annual amount of less than EUR 100,000;
• wishes to apply Luxembourg VAT on these sales;

any person established in Luxembourg, subject to the agricultural and forestry flat-rate taxation scheme and who wishes to be subject to the standard taxation scheme.

When should i file VAT returns in Luxembourg?

How frequently VAT returns must be filed depends on the total annual turnover excluding tax, and the deadlines for filing the returns are related to the frequency.

Businesses should create an account on the eCDF website to file their returns electronically once they are VAT registered.

Luxembourg VAT Rates

EU Member States are required to apply a standard VAT rate which is not lower than 15% and must be the same for the supply of goods and services. EU Member States may apply either one or two reduced rates which are not lower than 5% only to supplies of goods or services as listed in the Annex III of the VAT Directive.
See below the Luxembourg VAT Rates for goods and services at standard and reduced rate.

Standard 17% – All other taxable goods and services

Reduced 14% – Certain wines; solid mineral fuels, mineral oils and wood intended for use as fuel with the exception of wood for heating; washing and cleaning products; printed advertising matter; heat, cooling and steam with the exception of district heating; safe custody and administration of securities; administration of credit and credit guarantees by a person or organisation other than that granting the credit

Reduced 8% – Cleaning in private households; minor repairs of bicycles, shoes and leather goods, clothing and household linen; hairdressing; district heating; natural gas; electricity; firewood; LPG; cut flowers and plants for decorative use; some works of art and antiques

Reduced 3% –Foodstuffs; soft drinks; children’s clothing and footwear; water supplies; certain pharmaceutical products; certain medical equipment for disabled persons; domestic passenger transport; certain books (including e-books); certain newspapers and periodicals; admission to cultural events and amusement parks; some pay TV/cable TV; agricultural supplies (excluding pesticides); hotel accommodation; restaurants (excluding alcoholic beverages); take away food; bars, cafes and nightclubs, cut flowers and plants for food production; some supplies of new buildings; some construction work on new buildings; admission to sports events; use of sports facilities; undertaker and cremation services; collection of domestic waste; some telephone services; some writers and composers services (royalties); raw wool; treatment of waste and waste water; some goods and services for consumption on-board passenger transport; some works of art, collectors items and antiques

Zero 0% – Intra-community and international transport

VAT Deposit

Once the VAT application has been sent and accepted, before you can received your VAT number you must submit a VAT deposit to the tax office based on your future taxable activity, this will be held on account against your VAT liability should you not pay and removes the need to appoint a Fiscal Representative.