Luxembourg is a founding member of the European Union and was one of the first countries to adopt the Euro in 1999.
VAT rates in Luxembourg
The standard rate of VAT is 15%, and reduced rates of 3%, 6% and 12% are available.
VAT registration in Luxembourg
The VAT registration limit in Luxembourg for established businesses is €10,000 and zero for non-established businesses.
Distance sales have a limit of €100,000 for VAT registration.
The format for a VAT identification number is: LU 12345678. Every company must hold a number like this in order for accurate taxation.
VAT returns are flexible and can be submitted monthly and quarterly or annually depending on turnover.
Are there any Intrastat thresholds in Luxembourg?
Yes. There is a limit of €150,000 for dispatches and €200,000 for arrivals
VAT recovery in Luxembourg
- Is VAT recovery permitted for non-established non-EU businesses?
Yes, allows VAT recovery for all non-EU countries.
- Are there any non-VAT recoverable expenses?
No. Generally VAT is recoverable on business expenses relating to taxable supplies.
Reverse charge applies to the majority of cross border services.
Requirements and regulations in Luxembourg
A fiscal representative is not required of non-EU businesses but a security deposit may be requested to secure the company’s VAT liability.
Use and enjoyment rules apply to services such as telecommunications and broadcasting.
The period of VAT recovery by tax authorities has a timescale of 5 years in order to prevent fraud.
Similarly, there is a period of 5 years for VAT deductions and refunds.
Please contact us for further information about paying taxes in Luxembourg, and a member of our team will be happy to help you.