Luxembourg VAT Rules

E-learning activities:

E-learning activities falling within the scope of electronic services do not qualify for a VAT exemption unless made by a body, school, university or college which is either created by virtue of a law or is authorised and regulated by a public authority.

The conditions for the education exemption generally may be found in Article 44(1)(q) of the Luxembourg VAT law.

Gambling activities:

Gambling activities falling within the scope of electronic services do not (in principle) qualify for a VAT exemption.

The conditions for an exemption to be applied to gambling activities may be found in Article 44(1)(j) of the Luxembourg VAT law.

General:

There are further exemptions in the Luxembourg VAT legislation under which the supply of telecommunications, broadcasting and electronic services provided to non-VAT taxable persons may fall, but the application of such additional exemptions would depend on the nature of the services provided.

Invoicing:

No

Invoicing comment:

As a Member State of consumption, do you require an additional claim before making a reimbursement?:

No

Reimbursement threshold as Member State of consumption:

No threshold

Release from payment of insignificant amounts of VAT:

Luxembourg has not implemented a rule under its domestic legislation whereby taxable persons are released from the payment of VAT where the amount due is insignificant. There is however a special VAT regime for small businesses established in Luxemburg with an annual turnover below 25.000 EUR per year, detailed in Article 57 of Luxembourg VAT law.

Failure to register and late registration:

The applicable penalty for non-registration or late VAT registration ranges between EUR 250 and EUR 10,000 (as from 1 January 2017). If non-registration or late registration leads to tax being eluded, fraud penalty ranges between 10% and 50% of the eluded amount.

Reference to the above may be found in Article 77 of the Luxembourg VAT Law.

Incomplete and incorrect VAT returns:

The applicable penalty for incomplete or incorrect VAT returns ranges between EUR 250 and EUR 10,000 (as from 1 January 2017). Where VAT has been eluded by filing incomplete or incorrect VAT returns, fraud penalty ranges between 10% and 50% of any eluded (non-paid/late paid/refunded) amount.

Reference to the above may be found in Article 77 of the Luxembourg VAT Law.

Non-compliance with invoicing and accounting obligations:

The applicable penalty for not complying with VAT obligations ranges between EUR 250 and EUR 10,000 (as from 1 January 2017). Where VAT has been eluded through non-compliance with invoicing or non-compliance with accounting obligations, fraud penalty ranges between 10% and 50% of any eluded (non-paid/late paid/refunded) amount.

Reference to the above may be found in Article 77 of the Luxembourg VAT Law.

Non-payment and late payment of VAT:

The applicable penalty for non-payment or late payment of VAT ranges between EUR 250 and EUR 10,000 (as from 1 January 2017). Where VAT has been eluded, fraud penalty ranges between 10% and 50% of any eluded (non-paid/late paid) amount.

Reference to the above may be found in Article 77 of the Luxembourg VAT Law.

Non-submission and late submission of VAT returns:

The applicable penalty for non-submission or late submission of VAT returns ranges between EUR 250 and EUR 10,000 (as from 1 January 2017). Where VAT has been eluded by non-submission or late submission of VAT returns, fraud penalty ranges between 10% and 50% of any eluded (non-paid/late paid/refunded) amount.

Reference to the above may be found in Article 77 of the Luxembourg VAT Law.

VAT Registration Process:

To register under the MOSS, the taxable person shall need first to obtain a "LuxTrust" card and register for access to the eTVA system of the Luxembourg VAT Authorities. Requirement to register and details of the registration process are found in Article 56quinquies for non-EU suppliers and Article 56sexies for EU suppliers in the Luxembourg VAT law.

Useful links for information:

http://www.guichet.public.lu/entreprises/en/fiscalite/tva/vatmoss/vatmos...

http://www.aed.public.lu/tva/commerce-electronique/aed_introduction-vatm...

Appointment of a VAT Agent:

Appointment of an agent is allowed as of March 2015.

Deferment and Cash Accounting Scheme:

In Luxembourg, telecommunications, broadcasting and electronic services become chargeable in accordance with the normal rules provided for under Directive 2006/112/EC.

Reference to the above may be found in Articles 21-24 of the Luxembourg VAT Law.

Continuous supplies:

In Luxembourg, continuous supplies of services are taxable in accordance with the general principles laid down in Directive 2006/112/EC, detailed in Article 22 of the Luxembourg VAT law.

Additional obligations deemed necessary for collecting VAT and preventing evasion (anti-avoidance measures):

Luxembourg has not implemented any rules or anti-avoidance measures that may directly impact telecommunications, broadcasting and electronic services provided to non-VAT taxable persons.

Bad Debt relief:

The Luxembourg VAT Law provides for the adjustment of the taxable amount in case of total or partial non-payment from the customer, referred to in Article 33 of the Luxembourg VAT Law. Further detail of the conditions and form of such adjustments are found in Règlement Grand-Ducal of 21 December 1979.

Re-valuation of services at open market value:

Luxembourg has implemented provisions in its VAT legislation (Article 28 of VAT law) pursuant to which the taxable amount (of telecommunications, broadcasting and electronic services provided to non-VAT taxable persons) may be deemed to be the open market value.

Use and Enjoyment:

In Luxembourg, there is a use and enjoyment rule applicable to telecommunications and broadcasting services provided to non-VAT taxable persons. Accordingly, if the place of supply is Luxembourg but the service is used and enjoyed outside the EU, it is not subject to Luxembourg VAT.

Reference to the above may be found in Article 17.3.1° of the Luxembourg VAT Law.

VAT Treatment of vouchers:

Provisions of directive 2016/1065 have been fully implemented in national VAT law.