Value Added Tax (VAT) is a tax on turnover.
VAT-liable persons—who must first register for VAT with the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA - AED)—charge their customers a tax proportional to the price of the goods sold and/or the services provided.
Taxable persons must forward this tax (output tax), after deducting the VAT they are charged by their own suppliers (input tax), to the Registration Duties, Estates and VAT Authority, which is in charge of collecting it.
Natural or legal persons are liable for VAT if they independently and regularly conduct operations in connection with the performance of any economic activity, regardless of the aims or results of such activity and regardless of where it is conducted.
In order to be able to charge VAT to their customers, the taxable person must register for VAT with the Registration Duties, Estates and VAT Authority (AED), which will assign them a VAT number.
The following operations fall within the field of application of Luxembourg VAT:
However, in certain conditions, these operations may be VAT exempt.
An operation that corresponds to none of these categories is said to fall outside of the field of application of Luxembourg VAT.
At present, 4 different rates are applicable in Luxembourg:
In particular, a taxable person must:
For each calendar month, all taxable persons registered for VAT within the country must, in principle, produce and file a recapitulative statement listing the persons who are VAT-registered in a different EU Member State, to whom they have:
Since 1 January 2020, the declarations and recapitulative statement must be submitted to the Registration Duties, Estates and VAT Authority (AED) by electronic file transfer using the eTVA and eCDF systems (this is already mandatory for periods from 2017 onwards for recapitulative statements, and from 2015 onwards for VAT declarations).
Taxable persons who ship or transport goods from Luxembourg to another EU Member State must keep a record of the goods for the following activities:
A taxable person who has received movable tangible property from a VAT-registered customer in a different EU Member State for the purpose of conducting an assessment of or work on that property must keep sufficiently detailed accounts to enable these goods to be identified.
The taxable person must periodically declare their intra-Community acquisition of goods and services for which they, as the buyer, are liable for tax, and therefore have to pay the tax due.
Taxable persons established outside of the European Union may be required by the Registration Duties, Estates and VAT Authority to put down a deposit or submit a letter of guarantee to ensure payment of the tax and of any fines. This requirement must be fulfilled within one month of the Authority's request to do so.
Taxable persons who are exempt from tax must inform the Registration Duties, Estates and VAT Authority in writing, before 1 March, of the amount of their turnover in the previous year.
In principle, delivery of goods and provision of services are taxed on the basis of sales figures.
The tax becomes payable:
A taxable person whose annual turnover before tax is less than EUR 500,000 can apply to be taxed on the basis of their receipts. The tax applicable to deliveries of goods and the provision of services then becomes payable on receipt of full or partial payment for the goods/services. However, such persons may opt to be taxed on the basis of their sales. This exception scheme is aimed at small businesses conducting, either solely or primarily, operations at the final consumption stage (e.g., grocers, butcher's shops, taxis, etc.). This scheme is applicable only to operations which the taxable person conducts within the country, and for which they owe tax. The right to deduction is deferred until the tax on the goods or services provided has been paid to the supplier of the goods or provider of the services.
From the tax they charged their customers (output tax), the taxable person deducts the tax applicable to the goods and services they purchase for business purposes (input tax).
This includes the (input) tax:
After deduction of the input tax, the taxable person forwards the remainder of the output tax to the Registration Duties, Estates and VAT Authority. In the event of overpayment of the input tax, the taxable person can request a refund.
The tax must be paid:
Administration de l’enregistrement, des domaines et de la TVA
1-3, avenue Guillaume
Postal checking account: IBAN LU35 0019 5655 0668 3000
BIC code: BCEELULL
The deadline for payment of the tax is identical to the deadline for filing declarations.
The taxable person must clearly state their VAT number and the taxation period for which the payment is to be made.
All taxable persons can view the status of their VAT account in real time using the eTVA Consultation application (see under 'Forms / Online services') and their LuxTrust certificate.
Taxpayers may lodge an appeal:
The duly substantiated appeal against a bulletin in connection with an adjustment or automatic taxation must be filed in writing with the competent tax office within 3 months of its notification.
If that office rejects the appeal, either in part or in full, the director of the Registration Duties, Estates and VAT Authority is automatically notified of the appeal. In this case, the director re-examines the tax to which the claim pertains. The director's decision supersedes the former taxation imposed and, depending on the case, gives rise to the issuance of a notice confirming, in part or in full, the details of the bulletin against which the appeal was lodged, and/or the issuance of a notice of adjustment of that bulletin. The decision letter states the date of notification on which the taxable person is assumed to have received it.
The director's decision may be appealed. The appeal can be filed by means of a summons to the district court of Luxembourg, which holds jurisdiction in matters of civil law. In order to be accepted, the legal summons must be served to the Registration Duties, Estates and VAT Authority, in the person of its director, within 3 months of the notification date appearing on the letter stating the director's decision.
The procedure is identical for appeals against fines, apart from the fact that these must be addressed immediately to the director of Registration Duties, Estates and VAT Authority.