VAT Changes in Luxembourg

December 27, 2022

From 1 January 2023, some temporary VAT regime changes will come into effect in Luxembourg. They include lowering most of the current VAT, or the TVA — Taxe sur la valeur ajoutée — rates.

The standard VAT rate in Luxembourg will be lowered to 16% from the previous 17%. Intermediate rate — to 13%, from the previous 14%. The reduced rate will also see a 1% reduction from 8% to 7%. One VAT rate — the super-reduced rate of 3% — will see no change.

It is planned that the reduced VAT rates will be in place throughout the year 2023.

  • The standard rate in Luxembourg is applied to all transactions unless an exception is made stating the good or service is eligible for a reduced rate, zero rates or an exemption.
  • Zero-rated supplies are all intra-Community transactions, international transport, export of goods to third countries, and some other, primarily international trade-related supplies.
  • The reduced rate of currently 7% is applied to some services like household cleaning services, repairs, or hairdressing.
  • The super-reduced rate of 3% is applied to food and unflavoured water, water supplies, medicinal and pharmaceutical products, veterinary products, books and newspapers, admission to events, certain passenger transportation, HoReCa services, and similar.
  • The intermediate or parking rate of now — 13% applies to wine, fuels, washing products, printed advertising, heating, and some other items.

Such VAT reductions are used as economical means to help citizens cope with inflation and price increases.