Luxembourg applies the lowest standard VAT rate in the EU: 17 %. Rates reduced to 3%, 8% and 14%. Franchise threshold: 35 000 €. Quarterly or monthly declarations depending on turnover.
Manage my VAT with FidustraIn short: Luxembourg applies a standard VAT rate of 17 % (the lowest in the European Union), rates reduced to 3 %, 8 % and 14 %. The VAT exemption threshold is 35 000 € of annual turnover: below, a company can be exempt from VAT declarations but cannot deduct VAT on its purchases. The declaration is quarterly for most companies, monthly above €620,000 in annual turnover.
| Rate | Type | Goods and services concerned |
|---|---|---|
| 17 % | Standard rate | Majority of commercial goods and services, software, B2B services, consulting, real estate (new) |
| 14 % | Intermediate rate | Certain wines, mineral fuels, printed advertising, management of collective investment schemes |
| 8 % | Reduced rate | Renovation work on old homes (more than 2 years old), hairdressing, certain cultural services |
| 3 % | Super-reduced rate | Foodstuffs, medicines, books (paper and digital), press, personal services, water |
| 0 % | Exemption | Financial services, insurance, health, education, certain real estate operations, exports outside the EU |
The basic franchise threshold is set at 35 000 € of annual turnover excluding tax. Below this threshold, a company can opt for VAT exemption : it does not collect VAT and does not file periodic declarations. In return, she cannot deduct the VAT paid on her professional purchases.
This threshold applies to companies established in Luxembourg. Companies that cross this threshold must register for VAT and begin charging and reporting VAT as soon as they are exceeded.
The VAT declaration frequency depends on the annual turnover:
Declarations are submitted via the MyGuichet.lu portal. Fidustra manages all VAT declarations for your Luxembourg company.
Luxembourg
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Fidustra coordinates a trustee approved in Luxembourg who takes care of account keeping, quarterly or monthly VAT declarations, and the annual regularization declaration. You don't have to manage tax deadlines directly.
Discover the accounting departmentAnswers to the most common tax questions about Luxembourg VAT.
The normal VAT rate in Luxembourg is 17 %. This is the lowest rate in the European Union for the standard rate (for comparison: 20% in France, 21% in Belgium, 19% in Germany). This rate applies to the majority of commercial goods and services.
The VAT exemption threshold in Luxembourg is 35 000 € of annual turnover excluding tax. Below this threshold, the company may be exempt from VAT declarations but does not recover VAT on its purchases. Above the threshold, VAT registration is mandatory.
No. The VAT declaration is quarterly for the majority of companies (annual turnover less than €620,000 excluding tax). It becomes monthly above this threshold. An annual regularization declaration is always filed, regardless of the frequency.
For B2B services (between businesses), VAT is due in the country of the customer (general EU rule). If your client is a French company, French VAT at 20% applies via reverse charge to the French client. For B2C services (to individuals), Luxembourg VAT of 17% generally applies.
An expert coordinates your Luxembourg approved trustee — VAT declarations, annual balance sheet and tax return included.
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