Cross-border exemption scheme for small businesses

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Summary:

VAT-registered small businesses may be eligible for the cross-border exemption scheme, under certain conditions. This is a VAT exemption for small businesses that supply goods or provide services in a Member State of the European Union (EU) other than the Member State in which they are established.

Registration for the special scheme for small enterprises - cross-border exemption scheme

Under certain conditions, VAT-registered small businesses may be eligible for an exemption – specifically, a VAT exemption for the supply of goods and services in a Member State of the European Union (EU) other than the Member State in which they are established.

This is a cross-border exemption scheme that is open to:

  • businesses established in Luxembourg that operate in another EU Member State;
  • businesses established in another EU Member State that operate in Luxembourg.

This scheme is distinct from the domestic scheme, which covers businesses established in Luxembourg that operate only in Luxembourg.

To be admitted to the cross-border exemption scheme, businesses established in Luxembourg must first file a prior notification with the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA – AED) through MyGuichet.lu. In the near future they will also be able to report their turnover and update their information through MyGuichet.lu.

Who is concerned

Any taxable small business:

  • that is established in Luxembourg;
  • that supplies goods or provides services in another EU Member State;
  • whose annual turnover in the EU does not exceed EUR 100,000; and
  • whose turnover from the supply of goods and services in that other Member State does not exceed the threshold applicable in said Member State for the granting of the exemption.

Prerequisites

You must have a business eSpace on MyGuichet.lu.

How to create a business eSpace on MyGuichet.lu

There are 2 possible scenarios:

  1. You are a new user of MyGuichet.lu. You must:
    • first register on MyGuichet.lu; and
    • then create a business eSpace.
  2. You already have a private eSpace on MyGuichet.lu. You can directly create a business eSpace without having to register again.

Further information as well as tutorials in relation with the business eSpace are available in our dedicated help page.

Deadlines

Quarterly declarations must be filed no later than one month after the end of the calendar quarter, i.e.:

  • 30 April for the declaration covering the 1st quarter;
  • 31 July for the declaration covering the 2nd quarter;
  • 31 October for the declaration covering the 3rd quarter;
  • 31 January for the declaration covering the 4th quarter.

If you have been admitted to the cross-border exemption scheme and your turnover in the EU exceeds the Union threshold of EUR 100,000, you must notify the AED within 15 working days.

How to proceed

Registering for the cross-border exemption scheme

To be admitted to the cross-border exemption scheme, you must file a prior notification with the AED through MyGuichet.lu. This is a procedure that requires authentication using a LuxTrust product or an electronic identity card (eID).

You must specify:

  • the EU Member State(s) for which you would like to make use of the exemption;
  • the total turnover from the supply of goods and services in Luxembourg and in each of the other EU Member States during the previous calendar year;
  • the total turnover from the supply of goods and services in Luxembourg and in each of the other EU Member States during the current calendar year before the notification.

Following this notification, and for the application of the cross-border exemption scheme, you will be assigned an individual identification number that includes the suffix 'EX'.

Application of the cross-border exemption scheme

The exemption is applied in another EU Member State:

  • if a prior notification has been filed with the AED: starting on the date on which the AED provided you with your individual identification number;
  • if an update has been filed: starting on the date on which the AED confirmed your individual identification number following the update.

Filing a declaration of turnover

Every quarter you must file a declaration of the turnover declared in each EU Member State, as well as the turnover earned in Luxembourg, with the AED.

In other words, you must declare the turnover from all of the goods and services supplied in Luxembourg, as well as in all other EU Member States.

These declarations must be submitted online through MyGuichet.lu. This is also a procedure that requires authentication.

You must report the following information:

  • the total turnover from all of the goods and services supplied in Luxembourg during the calendar quarter, or '0' if no goods or services have been supplied;
  • the total turnover from all of the goods and services supplied in each of the Member States other than Luxembourg during the calendar quarter, or '0' if no goods or services have been supplied.

Exceeding the Union threshold

If the annual turnover in the EU exceeds the threshold (EUR 100,000) during a calendar year, the exemption that was granted to you for the EU Member States other than Luxembourg will cease to apply on the first day following the day on which the threshold was exceeded.

If this threshold is exceeded, you must declare to the AED the turnover from goods and services supplied in Luxembourg and in all other EU Member States between:

  • the beginning of the current calendar quarter; and
  • the date on which the Union threshold was exceeded.

This declaration must be filed online through MyGuichet.lu, and requires authentication.

In this declaration you must specify the date on which the threshold was exceeded.

Notification of changes

You must notify the AED of any changes to previously reported information.

Applications for updates must be filed online through MyGuichet.lu, and require authentication.

You may update:

  • the data provided in the registration form for the cross-border exemption scheme;
  • the amounts declared in the prior notification;
  • the list of Member States for which you have been admitted for the cross-border exemption scheme (MSEXE). You may also apply to have:
    • the exemption applied in EU Member States in which you are not established, other than those listed in the prior notification; or
    • the exemption for one or more of these EU Member States withdrawn.

If updating your information requires additional AED procedures, you will be notified accordingly.

Applying for exclusion

If you no longer wish to have the cross-border exemption scheme applied, you must file an application for exclusion with the AED through MyGuichet.lu (requires authentication) and explain the reason for withdrawing from the scheme, which may be that:

  • you simply no longer wish to have the exemption scheme applied;
  • you have ceased business operations;
  • you have transferred the seat of your economic activity to another EU Member State. If you would like to continue to have the cross-border exemption scheme applied from this other EU Member State, this Member State will then become the new Member State where your business is established.

Deactivation of the individual identification number

The AED will notify you of the deactivation of your individual identification number immediately, if:

  • your total declared annual turnover in the EU exceeds the EUR 100,000 threshold;
  • you may no longer claim the exemption;
  • the exemption has ceased to apply in the EU Member States other than Luxembourg;
  • you have declared that you no longer wish to have the exemption scheme applied in the Member States other than Luxembourg;
  • you have ceased your business operations.

Online services and forms

Online services

Registration for the special scheme for small enterprises - cross-border exemption scheme

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