VAT in Luxembourg: a complete guide for self-employed professionals and companies

Luxembourg VAT in one minute

VAT is a consumption tax. Under the regular VAT regime, a business generally charges VAT to its customer and pays it to the Registration Duties, Estates and VAT Authority (AED), after deducting recoverable input VAT where the legal conditions are met.

In practice, your VAT workflow comes down to three questions: how much VAT did you charge, how much input VAT can you deduct, and what balance is payable or recoverable for the period? The actual treatment always depends on the transaction and the right to deduct.

What are the VAT rates in Luxembourg in 2026?

The Luxembourg indirect tax portal lists four national rates currently in force.

The correct rate is not determined by the size of your business. It depends on the nature of the goods or services and the rules that apply to the transaction. When in doubt, check the official source or obtain professional advice before invoicing.

Need to convert a net or gross amount quickly? Use our Luxembourg VAT calculator with the 17%, 14%, 8% and 3% rates.

The small-business VAT exemption: the EUR 50,000 threshold

Luxembourg changed its national SME VAT exemption from 1 January 2025.

• The national threshold is EUR 50,000 of annual turnover in Luxembourg.
• A 10% tolerance allows the exemption to continue until year-end if turnover does not exceed EUR 55,000.
• If the threshold is exceeded by more than 10%, the exemption stops from the day after the threshold is exceeded.
• A business that exceeds the threshold during a calendar year is excluded from the national exemption for the following calendar year.

Under the national exemption, the taxable person does not show VAT on invoices and has no right to deduct input VAT for transactions covered by the scheme. Invoices must contain the wording required by Article 57bis of Luxembourg VAT law.

When and how do you register for VAT?

VAT identification is handled by the AED. The application includes information such as the effective start date of the activity, the financial year, whether intra-EU transactions are expected and an estimate of annual turnover excluding VAT.

That estimate is one of the elements used to determine filing frequency. The AED remains responsible for deciding on VAT registration and the filing frequency that applies.

How often do you file a Luxembourg VAT return?

According to Guichet.lu, filing frequency is linked to annual global turnover excluding VAT, unless the administration decides otherwise.

Businesses carrying out intra-EU transactions may also have to file recapitulative statements for goods or services. The exact obligation depends on the transactions performed.

Invoices: the VAT information you need to keep under control

A compliant invoice is an accounting record, commercial evidence and part of the VAT audit trail. For invoices above EUR 100 including VAT, Guichet.lu lists detailed mandatory information including party identification, date, sequential number, description, taxable amount, VAT rate and VAT amount where tax is due.

• Use a unique sequential invoice number.
• Keep the applicable VAT rate and VAT amount for each taxable transaction.
• Link each invoice to the corresponding accounting entry or bank transaction.
• For intra-EU B2B transactions, verify place-of-supply rules, the customer's VAT number and whether reverse charge applies.

A simple day-to-day VAT workflow

1. 1
   Issue every invoice with the correct VAT treatment from the start.
2. 2
   Collect supplier invoices and supporting documents continuously.
3. 3
   Match bank movements to the relevant invoices and expenses.
4. 4
   Review collected VAT and potentially deductible input VAT regularly.
5. 5
   Prepare the return before the deadline and have unusual items reviewed by your accountant or adviser when needed.