Country Guide: Luxembourg


Looking to expand your e-commerce business to Luxembourg, then look no further, here is AVASK's guide to VAT in Luxembourg:

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Country Profile: Luxembourg

Luxembourg E-commerce facts:

Population 0.62 million
(January 2020)
Currency: Euro (€)
Number of e-commerce users: 0.6 million
(January 2020)
Revenue in e-commerce market: £592 million
Estimated market growth: 6.8% to £771 million by 2024


Luxembourg thresholds and additional summary:

Distance Selling Threshold (DST) €100,000
Intrastat Thresholds:

Dispatches:
€150,000

Arrivals:
€200,000

VAT number format: LU 12345678
VAT return period:
(dependent on turnover)
Monthly or quarterly
VAT return deadline 30 days after end of reporting period
Annual VAT filing deadline: 30 days after year end
EC sales lists reporting Monthly or quarterly
(as VAT return period)

VAT in Luxembourg

Luxembourg is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

As an EU member state, Luxembourg is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Luxembourg is a member of the European single market economy and uses the Euro (€) as its currency. In Luxembourg VAT is known as: Taxe sur la Valeur Ajoutée, or TVA.


VAT registration in Luxembourg

Both EU and non-EU businesses may trade in Luxembourg without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Luxembourg for the registration of non-resident traders, but you will need one to record transactions and your customers in Luxembourg will want proof that you have obtained one.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Luxembourg VAT registration include:

  • Importing goods into Luxembourg;
  • Organising live events, conferences, etc. in Luxembourg;
  • Holding goods in a warehouse in Luxembourg as stock for resale;
  • Buying goods within Luxembourg that are subsequently re-sold in-country;
  • Selling goods from Luxembourg to other EU member states;
  • Distance-selling to private individuals in Luxembourg, e.g. internet retailing or trading through an e-commerce platform.

Registering for Luxembourg VAT generally takes between 3-4 weeks once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.

Luxembourg VAT compliance

There are detailed rules controlling the recording and processing of Luxembourg transactions for VAT purposes. This includes guidelines on:

  • Luxembourg invoice requirements;
  • When to issue a Luxembourg tax invoice;
  • Foreign currency reporting;
  • Credit notes and corrections;
  • Correcting entries from prior returns;
  • Which accounting records must be maintained.

Luxembourg VAT rates

VAT Rate % Rate
Standard Rate 17%
Reduced Rate 14%
8%
3%
Zero Rate 0%

Read more about International VAT and Compliance:

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