What you need to know about VAT in Luxembourg ?

luxembourgPosted on 01 January 2050 by Team

What is VAT?

VAT stands for value-added tax, a tax that is added at every step of the supply chain where value is added. It starts from raw materials, on to manufacturers, suppliers, the wholesalers, and finally on to the final customers. The VAT goes all the way down the supply chain where it reaches the end consumer. The end consumer will be carrying the VAT and cannot reclaim VAT. Over 140 countries around the world use this system, in the EU, the European Union guidelines are used.

It is important to realize that VAT is not a tax burden for you if you have a business liable for VAT; an EU registered business can always reclaim or offset VAT charged to the business on purchases.

What triggers VAT liability?

There are four main triggers:
1.Selling via an online marketplace

2.Importing goods from outside the EU

3.Acquiring goods from another EU country

4.Organising paid events in Luxembourg


applicable in Luxembourg:

  • a normal rate of 17% for taxable operations
  • a super-reduced rate of 3% for operations involving goods and services listed in Appendix B to the VAT law.
  • a reduced rate of 8% for operations involving goods and services listed in Appendix A to the VAT law
  • an intermediary rate of 14% for operations involving to goods and services listed in Appendix C to the VAT law.

For more info: guichet.public.lu/en/entreprises/fiscalite/tva/notions/tva.html

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