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Luxembourg VAT rates and VAT compliance

Luxembourg VAT rates

Luxembourg follows the European Union (EU) value added tax (VAT) compliance rules, but sets its own VAT rate. The only provision set out by the EU is that this rate is above 15%.


Luxembourg’s standard VAT rate is currently set at 17%. There are two reduced VAT rates of 14% and 8%, and a super reduced VAT rate of 3%.


As part of their VAT obligations, suppliers of goods or services VAT registered in Luxembourg must charge the appropriate VAT rate, and collect the tax for onward payment to the Luxembourg government through VAT returns.

Rate

Type

Which goods or services

17%

Standard rate

All other taxable goods and services.

14%

Reduced rate

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.

8%

Reduced rate

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.

3%

Super Reduced rate

Food products; 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; restaurant services (excluding alcoholic beverages); takeaway 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.

0%

Zero

Intra-community and international transport.

VAT exemptions

There are a small number of VAT exemptions in Luxembourg. These services include doctors’ and dentists’ services, financial and insurance services, postal services, education, cultural services, and certain sporting activities.

VAT registration in Luxembourg

The VAT registration threshold in Luxembourg for resident businesses is set at €35,000. As of January, 2025, it will increase to €50,000. There is no threshold for non-resident businesses.


The distance-selling threshold for businesses in other EU countries is €10,000. If a business’s cross-border sales with any EU country (intra-community transactions) exceeds this amount, it must register for VAT in Luxembourg.


Non-EU businesses selling in Luxembourg are not required to appoint a fiscal representative.

Luxembourg VAT compliance

Foreign businesses registered as non-resident VAT traders in Luxembourg are obliged to follow VAT legislation regarding bookkeeping, recording, and processing of invoices. This includes:


  • Preparing invoices with the disclosure details outlined in Luxembourg VAT laws

  • Maintaining accounts and records, which must be held for at least 7 years

  • Correct invoicing of customers for goods or services in accordance with the Luxembourg time of supply VAT rules

What is the tax point for Luxembourg VAT?

The tax point (time of supply) rules in Luxembourg determine when the VAT is due. It is then payable to the tax authorities 30 days after the VAT reporting period end (monthly or quarterly).
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Luxembourg VAT rates and VAT compliance
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