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Appendix B: Luxembourg VAT Rate Reference

Overview​

Luxembourg has a four-tier VAT rate structure. This appendix provides a comprehensive reference for VAT rates applicable to different goods and services.

VAT Rates (As of 2024-2025)​

Standard Rate: 17%​

  • Lowest standard rate in the European Union
  • Applies to most goods and services not specifically listed under other rates

Intermediate Rate: 14%​

  • Specific categories of goods and services

Reduced Rate: 8%​

  • Various goods and services

Super-Reduced Rate: 3%​

  • Essential goods and services

Detailed VAT Rate Classifications​

Super-Reduced Rate (3%)​

Food Products

  • Food products for human consumption (excluding alcoholic beverages)
  • Water (except mineral water and aerated water)
  • Animal feed
  • Seeds and plants used for food production
  • Pharmaceutical products
  • Medical equipment for disabled persons
  • Books, newspapers, magazines (physical and digital)
  • Children's clothing and shoes
  • Passenger transport
  • Restaurant services (food consumed on premises)
  • Admission to cultural events, museums, zoos
  • Social housing

Reduced Rate (8%)​

Goods

  • Certain food products (specified categories)
  • Some pharmaceutical products
  • Hotel accommodation
  • Admission to sporting events
  • Certain construction and renovation work (social housing)
  • Firewood

Services

  • Restaurant services (takeaway food)
  • Certain passenger transport services
  • Waste collection and treatment
  • Cleaning services for private households

Intermediate Rate (14%)​

Goods

  • Wine, beer, and other alcoholic beverages (when not consumed in restaurants)
  • Certain luxury goods
  • Some construction materials

Services

  • Restaurant services (alcoholic beverages)
  • Certain entertainment services
  • Some professional services

Standard Rate (17%)​

All other goods and services not specifically listed above

Common examples:

  • Electronics and appliances
  • Clothing (except children's)
  • Furniture
  • Professional services (legal, consulting, accounting)
  • Financial services (with specific exemptions)
  • Real estate transactions (with specific rules)
  • Most manufactured goods

Sector-Specific VAT Rules​

Restaurants and Hospitality​

Food Services:

  • 3% VAT: Food consumed on premises (dine-in)
  • 8% VAT: Takeaway food
  • 14% VAT: Alcoholic beverages

Accommodation:

  • 8% VAT: Hotel rooms and similar accommodation

Retail​

General Rules:

  • Most retail goods: 17% VAT
  • Food products: 3% VAT
  • Children's clothing: 3% VAT
  • Books and newspapers: 3% VAT

Professional Services​

General Rule:

  • Most professional services: 17% VAT
  • Includes: legal, accounting, consulting, IT services

Exceptions:

  • Medical services: Exempt (with right to deduct input VAT)
  • Educational services: Exempt (with conditions)
  • Financial services: Exempt (with specific rules)

E-Commerce​

Digital Goods:

  • E-books: 3% VAT
  • Software downloads: 17% VAT (unless educational)
  • Online courses: Exempt or 17% (depending on nature)

Cross-Border:

  • EU B2B: Reverse charge mechanism
  • EU B2C: VAT of customer's country (MOSS scheme)
  • Non-EU: Specific rules apply

VAT Exemptions (No VAT Charged)​

Exempt with Right to Deduct Input VAT​

  • Medical services
  • Educational services (under certain conditions)
  • Financial services (with specific rules)
  • Insurance services
  • Real estate transactions (with conditions)

Exempt without Right to Deduct Input VAT​

  • Postal services
  • Certain public services
  • Some financial transactions

VAT Registration Thresholds​

Standard Registration​

  • Mandatory: If annual turnover exceeds €35,000 (excluding VAT)
  • As of 2025: Threshold increased to €50,000 for SME scheme

SME VAT Scheme​

  • Threshold: €50,000 annual turnover (as of 2025)
  • Benefits: Simplified VAT procedures
  • Requirements: Must apply and meet criteria

VAT Return Filing​

Filing Frequency​

  • Monthly: If annual VAT liability > €10,000
  • Quarterly: Standard for most SMEs
  • Annual: Available for small businesses (with conditions)

Filing Deadlines​

  • Monthly returns: By 15th of following month
  • Quarterly returns: By 15th of month following quarter end
  • Annual returns: By 15th of February following year end

Electronic Filing​

  • All VAT returns must be filed electronically via eCDF platform
  • Paper returns no longer accepted

Cross-Border VAT Rules​

EU Transactions​

B2B (Business to Business):

  • Reverse charge mechanism applies
  • Customer accounts for VAT in their country
  • Supplier issues invoice without VAT

B2C (Business to Consumer):

  • Supplier charges VAT of customer's country
  • Use MOSS (Mini One Stop Shop) scheme for simplification

Non-EU Transactions​

Imports:

  • VAT payable at import
  • Can be recovered as input VAT (if registered)

Exports:

  • Zero-rated (0% VAT)
  • Must provide proof of export

Common VAT Errors to Avoid​

  1. Incorrect Rate Application

    • Confusing restaurant rates (3% vs 8% vs 14%)
    • Misapplying reduced rates

  2. Missing Documentation

    • Incomplete invoices
    • Missing VAT numbers for EU transactions

  3. Timing Issues

    • Recording VAT in wrong period
    • Late filing penalties

  4. Input VAT Recovery

    • Claiming VAT on non-deductible items
    • Missing deadlines for recovery

  5. Cross-Border Errors

    • Incorrect application of reverse charge
    • MOSS registration issues

VAT Accounting in PCN​

Accounts Used​

VAT Payable (Output VAT):

  • Account 430000: TVA à payer
  • Record VAT charged on sales

VAT Recoverable (Input VAT):

  • Account 431000: TVA récupérable
  • Record VAT paid on purchases

VAT Settlement:

  • Net amount (payable - recoverable) paid to/received from tax authorities

Resources​

Official Sources​

Notes​

  • VAT rates and rules are subject to change
  • Always verify current rates with official sources
  • Consult a tax advisor for complex situations
  • This reference is for guidance only; official regulations take precedence