The 'supply of services' refers to all transactions that do not constitute a supply of goods nor an intra-EU acquisition or import of goods.

It includes the sale of a service or the rental of tangible goods but not the sale of a tangible good.

The VAT applicable to the provision of services depends on the type of customer and the type of service.

VAT is, in principle, payable:

• in the customer's country of establishment in the case of a provision of services between taxable persons ("B2B – Business to Business", i.e. between professionals);
• in the service provider's country of establishment in the case of the provision of services to end consumers ("B2C – Business to Consumer", i.e. between professionals and consumers).

Some services are an exception to this rule, for both taxable and non-taxable persons.

Who is concerned

The obligations regarding the application of VAT with respect to the provision of services must be observed by any business subject to VAT and which:

• provides taxable services in another country of the European Union (EU);
• or receives services provided by foreign businesses.

Preliminary steps

Businesses liable for VAT in Luxembourg must:

• register for VAT with the Luxembourg Registration Duties, Estates and VAT Authority (AED);
• declare the VAT to the Registration Duties, Estates and VAT Authority;
• submit recapitulative statements concerning service provisions (in the event of intra-EU provision of services).

How to proceed

Principle

B2B – VAT in the customer's country of establishment

Services provided between taxable persons ('B2B') are in principle subject to VAT in the customer's country of establishment, i.e. in the country in which its registered office is located or, failing this, where it has a permanent establishment which is receiving the services.

B2C – VAT of the service provider's country of establishment

Services provided to non-taxable persons ('B2C') are in principle taxable in the service provider's country.

Exceptions common to both B2B and B2C relationships

Building-related services

VAT is due in the country in which the building is located.

Transportation of persons

VAT is due in the various countries travelled through based on the distance covered.

Services in the areas of culture, arts, sports, science, education, entertainment and similar events

VAT is due in the place where these events actually take place.

Catering services (other than on board a train, boat or aircraft)

VAT is due in the country in which the service is materially executed.

Short-term leasing of means of transport

VAT of the country where the lessee will take possession of the means of transport applies.

A means of transport is a vehicle whether or not it is motorised or any other equipment devised for the transportation of goods or persons from one place to another, which may be drawn, towed, or pushed by vehicles.

Short-term leasing is defined as being leasing of less than 30 days (other than in the case of boats for which the leasing period is 90 days).

Exceptions in B2C relationships

Services provided by intermediaries acting on behalf of others

VAT is due in the country in which the main transaction is carried out.

Intra-EU transportation of goods

VAT is due in the country of departure of the goods.

Transportation of goods other than in intra-EU transportation

VAT is due in the various countries travelled through based on the distance covered.

Transport-related services

VAT is due in the country in which the service is materially executed.

Work on and valuation of movable tangible property

VAT is due in the country in which the service is materially executed.

Provision of intangible or intellectual services outside the EU

VAT is due in the customer's country.

The following are considered to be 'intangible services':

• transfer and concession of copyrights, patents, licences, brands;
• advertising services;
• legal, consulting, chartered accountant, engineering services, etc.;
• data processing and provision of information;
• financial, insurance and reinsurance transactions;
• provision of personnel;
• rental of movable tangible assets (other than the rental of means of transport which remains subject to the principle of origin);
• provision of access to natural gas or electricity distribution systems or heating or cooling networks (and directly related services);
• services provided electronically.

Services in the fields of telecommunication, radio broadcasting and television

VAT is due in the service provider's country of establishment, unless the non-taxable person is established outside of the EU. In this case, the services provided are taxable in the buyer's country of residence as is the case for other intangible services. On the other hand, these services are taxable in the country where they are effectively being used and performed, on condition that the services were provided by a taxable person established outside the EU to a non-taxable person established in the EU.

Summary tables

 

Who to contact