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When a person buys a vehicle (new or used) in a country outside the European Union (EU), they must carry out certain customs clearance formalities. These formalities may be carried out either in Luxembourg or in the Member State of entry.
The formalities required of purchasers of new and used vehicles include customs formalities in connection with the payment of customs duties (up to 10 % of the purchase price of the vehicle), certain costs, and VAT (17 % in Luxembourg).
Who is concerned
The following are concerned:
- all private individuals (Luxembourg residents) who purchase a vehicle (car or two-wheeler with a cylinder capacity of more than 48 cm3) in a country outside the EU;
- companies (established in Luxembourg) which purchase a vehicle in a country outside the EU.
Persons who purchase a vehicle themselves in an EU member state must be able to produce all necessary documents in the event of a roadside check, that is to say:
- a certificate of compliance issued by the manufacturer;
- a registration certificate;
- a certificate of insurance issued by an insurance company;
- any transport documents.
How to proceed
Importation under the T1 external transit regime
For vehicles purchased outside the EU, customs duties and VAT are normally payable in the EU Member State of first entry. However, by filing a transit declaration using the T1 form, it is possible to suspend payment of such taxes in the Member State of entry and pay them in the Member State of destination. If the Member State of destination is Luxembourg, VAT will be payable at the rate of 17 %.
If the customs clearance formalities for a used vehicle—i.e., a vehicle which has travelled more than 6,000 kilometres and for which more than 6 months have elapsed since its first entry into service—purchased by an individual who is not subject to VAT are completed in the Member State of entry, the applicable VAT rate will be that of the country of entry. In that case, the customs duties and VAT paid in the Member State of entry need not be paid in Luxembourg.
When a new vehicle—i.e., a vehicle which has travelled fewer than 6,000 km or for which fewer than 6 months have elapsed since its first entry into service—is cleared through customs (regardless of whether the person clearing the vehicle is subject to VAT or not), or when a used vehicle is cleared through customs by a person who is subject to VAT, VAT is always payable in the Member State of destination. If the Member State of destination is Luxembourg, VAT will be payable at the rate of 17 %.
Customs duties are payable in the country of clearance and are set at 10 %.
The T1 form can be obtained from any customs office or agency.
The purchaser must provide a brief description of the vehicle and specify its purchase price on the T1 form. If the value of the vehicle reported by the buyer does not match the actual value as determined on the basis of external sources (specialised sites), it will be readjusted by the Customs and Excise Agency (l’Administration des douanes et accises).
If the vehicle is cleared in Luxembourg, the Customs and Excise Agency may demand payment of customs duties and VAT on the difference between the value reported by the purchaser and the actual value.
This declaration must be signed by the person who introduces the vehicle and must be handed over to the customs authorities of the Member State of departure (i.e., the State of first entry into the EU ).
The T1 external transit procedure requires buyers to leave a security deposit with the office of departure (which may be a port or airport). Buyers may also get in touch with a customs broker, who will make the security deposit available to them. The security deposit serves as a guarantee for the payment of the customs duties and other taxes that Member States may have fixed. In practice, a customs agency specialising in this area is usually used.
Presentation at the office of the Customs and Excise Agency
In order to clear the vehicle, the private individual, self-employed person or representative of a company must go in to a Customs and Excise Agency office in person with the vehicle to obtain a 705 sticker to register the vehicle.
Private individuals or company representatives can contact the offices in Diekirch, Grevenmacher or the customs centre in Gasperich - P&R Lux-Sud / Luxembourg-City.
The 705 sticker is a document issued by the Customs and Excise Agency proving that a vehicle that has yet to be registered is in order with regard to VAT.
To obtain the sticker, the purchaser must produce the following documents:
- the previous registration certificate (if the vehicle has already been operated);
- the original certificate of conformity (when importing a used vehicle, the certificate of conformity is not required);
- the original invoice for the purchase of the vehicle, or the sales contract, or possibly proof of payment;
- the registration number that was requested beforehand, if the vehicle does not have one;
- the insurance certificate;
- the national identification number (matricule - 13-digit social security number), or the tax registration number.
All documents presented to the Customs and Excise Agency must be original copies. They will be returned by the Agency at a later stage.
Private individuals must also provide the following documents:
- the import declaration, prepared preferably by a customs agency;
- a valid identity document (ID card or passport);
Payment of customs duties
The customs duty of 10 % is calculated on the value of the vehicle plus certain costs. Payment is made at the office of the Customs and Excise Agency in euros.
The applicable VAT regime differs depending on whether the purchaser is a person who is not subject to VAT (such as a private individual) or an entity which is subject to VAT (such as an self-employed worker or a limited liability company). Persons subject to VAT must pay Luxembourg VAT, regardless of whether the vehicle is new or used. Persons who are not subject to VAT must pay Luxembourg VAT only if the vehicle is new or used and cleared in Luxembourg.
The purchaser may be exempted from the payment of customs duties and Luxembourg VAT, in particular in the case of a transfer of residence (provided that the conditions set forth in Council Regulation 918/83 of 28 March 1983 are satisfied), or if the purchaser has diplomatic status or is a European civil servant.
Payment of VAT
The VAT payable amounts to 17 % of the reported price of the vehicle.
Only persons not subject to VAT are required to pay VAT (at one of the Customs and Excise Agency offices). They must obtain an import declaration form from one of the Customs and Excise Agency offices (in Diekirch, Grevenmacher or the customs center in Gasperich - P&R Lux-Sud / Luxembourg-City) and then submit the completed declaration to one of those offices.
After payment is made, the Customs and Excise Agency office will return Part 8 of the import declaration form to the person who filed the declaration. This document serves as proof of payment of the VAT.
For persons subject to VAT (self-employed persons or companies), this formality is not applicable and payment is made via the 'normal' VAT return.
Issuance of the 705 sticker
When the formalities described above have been completed, the Customs and Excise Agency will issue a 705 sticker. This is required to register the vehicle at one of the 3 SNCA sites (Sandweiler, Esch-sur-Alzette or Wilwerwiltz).
As part of the registration procedure in Luxembourg, the vehicle must be taken in for a technical inspection to verify its technical compliance (the "acceptance" procedure) and to ensure that it is in good working order.
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