Luxembourg's VAT Changes: Key Updates for 2025

LuxembourgPosted on 03 January 2025 by Team

On June 26, 2024, the Luxembourg government approved a draft bill to implement changes in VAT regulations, set to take effect on January 1, 2025. These changes, driven by EU Directives, will significantly impact various sectors and business operations in Luxembourg. Here are the main updates:

Small Enterprise Scheme:

The turnover threshold for the small enterprise scheme will increase from €35,000 to €50,000 ex VAT per year. This threshold will now apply to both domestic and cross-border transactions, benefiting businesses engaged in international trade.

Art and Antiques:

The margin taxation scheme for works of art, second-hand goods, collectors' items, and antiques will be replaced with a reduced VAT rate of 8%. This change aims to maintain Luxembourg's competitiveness in the art trade market.

Event Taxation:

The place of taxation for cultural, artistic, sporting, scientific, educational, and entertainment events will change. Physical events will continue to be taxed where they take place, while virtual events will be taxed based on the client's location. This update aligns VAT treatment with modern practices but may complicate VAT obligations for service providers.

International Passenger Transport:

The VAT exemption for passenger transport to or from foreign countries will be abolished. Luxembourg VAT will apply only to the portion of the journey within Luxembourg, potentially creating complexities for companies involved in international passenger transport.

These changes will require Luxembourg businesses to review their operations and adapt their systems accordingly. The draft bill is currently undergoing the legislative process and is expected to be implemented as planned.

deloitte.com/lu/en/services/tax/perspectives/how-will-luxembourgs-vat-change-from-1-january-2025.html
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