Persons established in Luxembourg who are liable for Value Added Tax (VAT) may, in certain circumstances, apply for a refund of the VAT paid in another EU Member State, using the intra-EU refund system (Directive 2008/9/EC).
Who is concerned
Persons in Luxembourg who are liable for VAT can apply for a refund of the VAT paid in another EU Member State, on condition that:
- they are not legally established in the country where the VAT was paid;
- they have not delivered goods or provided services liable for VAT in the country where the VAT was paid.
Taxable persons established in other EU Member States that wish to receive a Luxembourg VAT refund should contact the tax authorities in their Member State.
For the payer to be entitled to a refund, the expenses must be:
- necessary for the conduct of the taxable person's economic activity;
- services rendered that are eligible for a tax deduction, e.g., expenses in connection with transport (fuel, rental of commercial vehicles) and dining, entry fees for fairs and exhibitions, etc.;
- subject to VAT considered deductible in the EU Member State where the VAT was paid.
The expenses must be supported by invoices bearing certain mandatory information, in particular the intra-EU VAT number of the customer and supplier.
To claim a VAT refund from another Member State, a taxable person must have:
- access to the eTVA system which also grants access to the VAT Refund system; and
- a professional Luxtrust certificate, in the form of a Smartcard pro or a Signing stick.
Exclusions from the deduction entitlement applicable in one country may not necessarily exist in other EU Member States. It is therefore important to check that the expenses in question do carry the entitlement to a VAT deduction before submitting the application.
The refund application must be submitted no later than 30 September of the calendar year following the refund period.
How to proceed
Minimum claim amounts
The application for a refund must be for a minimum VAT amount of:
- EUR 400 (or its equivalent in local currency) in the case of applications referring to periods of between 3 months and less than one calendar year;
- EUR 50 (or its equivalent in local currency) in the case of applications referring to a calendar year or the remainder of a calendar year.
Applications for refunds
Applications for VAT refunds should be made online using the VAT Refund system.
They must pertain to a period of time of between:
- at least 3 calendar months, unless the period of less than 3 months represents the remainder of a calendar year;
- a maximum of one calendar year.
The AED will check that the company in question is indeed liable for VAT, and that its activities carry eligibility for a refund. If that is the case, the AED will inform the applicant and forward the application to the authorities of the Member State from which the refund is requested.
The latter will confirm receipt of the application and communicate their decision directly to the taxpayer by email or post within 4 months of receiving the application. This 4-month period is extended by a further 2 months if the foreign tax authorities submit a request for original documents (rather than copies).
If the application is accepted, then the foreign authorities have 10 working days from the end of the 4-month period to refund the VAT.
Late-payment interest will be paid to the company if the authorities fail to observe these deadlines.
Management of mandates (eTVA-M)
The Registration Duties, Estates and VAT Authority has made available a mandate management portal (eTVA-M) for VAT taxable persons. This portal enables the management of electronic mandates with respect to the VAT Refund.
All users of the eTVA systems have automatically access to the eTVA-M system.
This mandate management system provides the following functionalities:
- the mandate must be given by the principal, so the principal must also have eTVA access;
- for a new mandate to apply, it must first be accepted by the representative, who can also refuse a proposed mandate;
- the active management of mandates is reserved for the principal manager and the managers. Simple users can only consult mandates given or received.