Luxembourg VAT increase coming soon

Luxembourg to raise VAT 2%

From the 1st of January 2015 Luxembourg is to hike all rates other than its super reduced rate of VAT by 2%, increasing the standard rate of 15% to a rate of 17% and reduced VAT rates will rise from 12% and 6% to 14% and 8%, respectively. The rate of the super reduced rate is to be unchanged at 3 percent but its scope will change.

The Prime Minister confirmed that the measure would help raise €350 million which would be vital to compensate for the scheduled change in EU 2015 B2C VAT digital services place of supply rules. Many companies base their digital download business headquarters in Luxembourg due to its low VAT rate, however when the VAT rule changes in 2015, where companies pay the VAT of the country in which the product is downloaded, Luxembourg is set to lose out approximately €700million per annum.

If your company is registered for VAT in Luxembourg you should be aware that any change in the VAT rates will affect businesses both as suppliers and as customers. Businesses registered for VAT in Luxembourg should therefore keep well-informed with the planned VAT developments and adjust accordingly.

For more information please see:

Luxemborg confirms VAT rise for 2015 – from
Luxemborg issue guidance ahead of 2015 VAT rate changes.


Digital Media downloads – Luxembourg forced to raise VAT rate

The Luxembourg is still moving forward with a plan to raise its standard VAT rate from 15% to 17% on 1 Jan 2015.  This is to compensate for the changes in the VAT rules on B2C electronic services which Luxembourg currentl dominates due to their low VAT rates.