Businesses established in a country in the European Economic Area (EEA) or in the Swiss Confederation (CH) can undertake occasional and temporary commercial, craft, industrial or liberal activities in Luxembourg without having a permanent establishment in the country.
They must, in this case, comply with certain formalities required by various competent authorities in Luxembourg with regard to:
- service notification (craft or manufacturing business);
- VAT applicable to the service;
- posting of staff;
- taxation of profits.
Who is concerned
Businesses established in an EEA country or in the Swiss Confederation (CH) benefit from the liberalisation of the provision of services based on the principle of the mutual recognition of qualifications.
Therefore, they can freely provide occasional and temporary services in Luxembourg.
However, these services may only be supplied in Luxembourg provided the business is authorised to supply the same services in its country of origin.
On the other hand, businesses established outside the EEA or the Swiss Confederation must have a business permit for all their occasional and temporary activities in Luxembourg.
Businesses which intend to provide services on a regular basis in Luxembourg have to set up a permanent establishment in Luxembourg and apply for a business permit.
Recognition of qualifications
Regulated activity in the Member State of origin - mutual recognition
If the profession is regulated in the Member State where the business is lawfully established, the qualifications required to carry out the profession are mutually recognised.
Exceptions: in the case of activities which may have an impact on the public safety or health, the authorities may require the provider to comply with the conditions of access to the profession in Luxembourg. The business operator must hold a Master Craftsman's certificate or equivalent (brevet de maîtrise) to occasionally carry out one of the following craft trades in Luxembourg:
- heating-sanitary-refrigeration installer;
- lift, goods lift, escalator and handling equipment installer;
- or carpenter - roofer - tinsmith.
Unregulated activities in the Member State of origin - check of qualifications
If the profession is not regulated in the Member State of origin of the provider but is regulated in Luxembourg, the Luxembourg authorities can check the equivalence of professional qualifications by requesting:
- professional experience of one year during the past 10 years in the Member State of origin;
- and a training certificate providing proof of the qualification to carry out said profession.
Activities which are occasional in nature
Whether there is an occasional and temporary nature of the activity is decided on a case by case basis which mainly depends on the duration of the activity, its frequency, periodicity and continuity.
If the activity is carried out beyond the scope of an occasional and temporary provision of services, businesses must have a fixed establishment in Luxembourg and apply for a business permit.
How to proceed
Commercial or self-employed activities - no notification
Businesses in the EEA or Switzerland which occasionally provide services falling under commercial or liberal professions which are subject to a business permit are exempt from administrative authorisation and prior notification by the Luxembourg authorities.
All other activities - notification of occasional provision of services
Each service provider must first inform the Ministry of the Economy - General Directorate for Small and Medium-Sized Enterprises by submitting a written declaration which must contain the following information:
- their insurance cover; or
- any other means of personal or collective protection in terms of professional liability.
Providers have to renew their notification once a year if they intend to provide temporary or occasional services in Luxembourg during the year.
The notification can be submitted by any means: post, email.
The notification must be accompanied by the following documents:
- proof of the provider's nationality;
- proof of professional qualification (the General Directorate for Small and Medium-Sized Enterprises reserves the right to request any document providing proof that the provider has equivalent qualifications to those required in Luxembourg);
- a certificate from the competent administration in the country of origin certifying that the provider:
- is legally established in a Member State of the European Union to carry out the activities concerned in said Member State;
- is not to be prohibited from exercising the activity at the time of issue of the certificate, irrespective whether the prohibition is temporary or permanent;
- has never been criminally sanctioned (extract from the criminal record). It should be noted that the provision of proof of absence of criminal sanctions and absence of a temporary or permanent prohibition to carry out the activity also applies to professions related to the education of minors including childcare actvities or early childhood educational services;
- any document proving that the professional belonging to a non-regulated profession has actually carried out said activity for at least one year during the past 10 years.
Most supporting proof required can be listed on a document called "EC - Certificate of Experience" (Certificat CE), which can be obtained from the competent authorities in the Member State of origin. This document certifies that the provider has the necessary qualifications to carry out the profession in the country of origin.
Providers whose services have an impact on the safety of patients must provide a declaration regarding their knowledge of the language required to carry out the profession in Luxembourg.
If the provider's material situation changes compared to the declarations made in the original documents submitted, they are required to submit new documents concerning the changes to the competent authorities.
If the provision of occasional services concerns the health sector or has consequences on the safety of patients, specific rules apply.
Additional verifications for professions in the public health and safety sector
The Luxembourg authorities can check the service provider's professional qualifications if:
- it is their first provision of services in Luxembourg;
- it is a regulated profession in the public health and safety sector which does not benefit from automatic mutual recognition.
The verifications will be undertaken prior to the first provision of services.
Within one month from the receipt of the full notification file, the Ministry of Health will inform the service provider of its decision.
If no response is received from the administration within one month, the provision of services is authorised.
Service providers who do not provide proof of sufficient qualifications are invited by the administration to take an aptitude test.
VAT applicable to the provision of services
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 buyer's country of establishment in the case of the provision of services between taxable persons ('B2B');
- in the service provider's country of establishment in the case of the provision of services to end consumers ('B2C').
However, the VAT applicable to the provision of services contains certain exceptions to this rule, both for taxable and non-taxable persons.
Foreign businesses which carry out operations subject to Luxembourg VAT must register for VAT with the Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA).
Taxation of business profits
Generally speaking, companies which provide occasional services in Luxembourg are subject to tax on profit in their country of establishment and not in Luxembourg.
However, in the case of a long term provision of services and pursuant to the double taxation agreement, the company is deemed to have a permanent establishment from a fiscal point of view. In this particular case, the foreign company must declare all profits made within the framework of the services provided to the Luxembourg Inland Revenue.
Posting of workers
A business established in the Swiss Confederation or in an EEA country can freely post its workers to Luxembourg within the framework of a provision of services, provided the workers (whatever their nationality) are duly authorised to work and stay in the country of establishment of the posting business.
In all cases, employees must be permanent staff of the foreign business.