VAT Registration

Value Added Tax (VAT) is a consumption tax. It constitutes a tax on turnover (TO) which burdens final consumption and is levied at each stage of the operation on the turnover of the various participants.

It targets all operations related to economic activity and taxes the value added to the product.

VAT is - in principle - neutral and is not part of the cost price: taxpayers first calculate the downstream tax by applying the prescribed rate to the turnover achieved; the resulting amount is then reduced by the tax charged to the taxpayer by its suppliers (upstream tax).

To register for VAT, the company (= the taxpayer) must submit an initial declaration to the Tax, Registration, and Domains Administration (AED).

Persons Concerned

Any person engaged in an activity that gives them the status of taxpayer must generally register for VAT.

Any natural or legal person who independently and habitually carries out operations related to any economic activity, regardless of the purpose or results of that activity and regardless of its location, is subject to VAT.

Mandatory Registration

Registration for VAT is required for:

any person established in Luxembourg who starts a taxable activity and who presumes that their annual turnover (TO) will exceed 30,000 euros; any person not established or domiciled in Luxembourg, but who carries out operations subject to Luxembourg VAT, such as occasional and temporary service provision, including services related to real estate located in Luxembourg and the delivery of goods with installation or assembly in Luxembourg, for which they are liable for the tax, regardless of their turnover; any non-taxable legal person who makes intra-community acquisitions of goods, for an annual amount excluding tax exceeding 10,000 euros; any taxpayer established in Luxembourg who only carries out operations that do not entitle to deduction and who has services provided by a taxpayer established abroad for which the recipient is liable for the tax; any taxpayer established in Luxembourg who only carries out operations that do not entitle to deduction and who provides taxable services whose place is located in another Member State and for which the recipient is liable for the tax; any person established in Luxembourg, subject to the flat-rate agricultural and forestry taxation scheme, who makes deliveries of wine, sparkling wine, wood, or investment goods for an annual amount exceeding 30,000 euros; any person established and identified for VAT in another Member State of the European Union (EU) who, with the assumption of dispatch or transport, makes deliveries of goods to persons not identified for VAT established or domiciled in Luxembourg, for an annual amount exceeding 100,000 euros. This category of goods deliveries is commonly referred to as "distance sales".

VAT Exemption

Taxable persons whose annual turnover excluding tax for a calendar year has not exceeded 30,000 euros benefit from a VAT exemption.

However, they are still required to inform the administration of the amount of their turnover for the previous calendar year. Therefore, they must submit a declaration of their turnover to the administration before March 1st.

Optional Registration

Registration for VAT is optional for:

any person who wants to waive the exemption provided for in respect of the supply and leasing of immovable property and opt for VAT application on these operations; any person established in Luxembourg whose annual turnover excluding tax is less than 30,000 euros but who wishes to opt for the normal taxation regime; any taxable person engaged in a wholly exempt activity not entitling to deduction of the upstream tax, or benefiting from the small business exemption scheme or a flat-rate taxation scheme, as well as any non-taxable legal person established in Luxembourg making intra-community acquisitions of goods for an annual amount excluding tax less than 10,000 euros but who wishes to opt for the taxation of these acquisitions in Luxembourg; any taxable person established and identified for VAT in another EU Member State who, with the assumption of dispatch or transport, makes deliveries of goods to persons not identified for VAT (distance selling) established or domiciled in Luxembourg, when the annual amount of these deliveries is less than 100,000 euros, and who wishes to apply Luxembourg VAT to these sales; any person established in Luxembourg, subject to the flat-rate agricultural and forestry taxation scheme, who wishes to be subject to the normal taxation regime.

Preparatory Steps

Before registering for VAT, companies must have opened a bank account or CCP with a Luxembourg or foreign bank.

Deadlines

VAT registration must be done:

within 15 days following the start of the activity for taxpayers who are not exempt from registration; before the 1st day of the month following the one in which the exemption threshold is exceeded (within the same calendar year); for taxpayers exempt from registration and for non-taxable legal persons, before the performance of the following operations: provision of services on the territory of another Member State for which only the recipient is liable for the tax; intra-community acquisitions of goods subject to Luxembourg VAT; receipt of services from providers established outside the Grand Duchy for which the recipient is liable for VAT.

Practical Procedures

Initial Declaration

To register for VAT, the taxpayer must submit to the competent tax office the initial declaration or the declaration of option corresponding to their situation, namely:

when registration is mandatory: either an initial declaration for individuals; or an initial declaration for legal entities; or an initial declaration (AIC) for individuals (individual subject to tax but exempt from VAT registration who makes intra-community acquisitions of goods for an annual amount excluding tax exceeding 10,000 euros); or an initial declaration (AIC) for legal entities (non-taxable legal entity making intra-community acquisitions of goods for an annual amount excluding tax exceeding 10,000 euros); when registration is optional: either a declaration of option (AIC) for individuals; or a declaration of option (AIC) for legal entities.

These declarations can be made either online via MyGuichet or by mail using the corresponding forms.

Note: Taxpayers conducting economic activities in Luxembourg with their registered office outside Luxembourg but within the EU are registered with the Luxembourg 10 tax office.

Documents and Information to be Attached to the Application

For legal persons (companies), the declaration must be accompanied by:

a copy of the articles of incorporation in French or German; a copy of the identity card (or passport) of the named partners in the articles of incorporation and/or the managers-directors of the company. For individuals, the declaration must be accompanied by:

a copy of the identity card/passport of the taxpayer. The information to be provided in the initial declaration includes:

for a company: 

• - company name; 
• - legal form; 
• - registered office address; 
• - date of incorporation and, for Luxembourg companies, if available, the number of the Memorial C or the Electronic Collection of Companies and Associations (RESA) in which the publication took place, otherwise indicate "Publication to come"; names and addresses of the named partners in the articles of incorporation and/or the managers/directors of the company; for an individual: names and surnames of the taxpayer; 
• - civil status; gender and place of activity; 
• - complete private contact details; 
• - number of the bank account or CCP opened with a Luxembourg or foreign bank (IBAN + BIC code); 
• - date of actual commencement of activity determining the first period for which a VAT declaration must be filed; 
• - fiscal year; expectation of intra-community acquisitions and deliveries of goods or services; estimated annual turnover excluding tax.

This estimate will be one of the elements used to determine the filing frequency for declarations: VAT Declaration Frequency TO ≤ 112,000 euros 112,000 < TO ≤ 620,000 euros TO > 620,000 euros

Competent tax office will decide on the registration application of the applicant. In addition to the information provided on the initial declaration, the administration may require the submission of other information or documents related to the economic activity of the person applying for registration or obtaining a VAT identification number.

Granting of VAT Number

Once registered for VAT and thus enrolled, the taxable person (or the non-taxable legal entity) receives a VAT identification number composed of a unique and identical group of 8 digits preceded by the letters "LU".

The VAT identification number is used in intra-community exchanges.

For communication with the administration, however, the taxable person still uses the 11-digit national registration number assigned to them:

by the social security administration during their first registration in Luxembourg if they are a natural person; by the State Information Technology Centre following the publication of the articles of incorporation in the Memorial C or the Electronic Collection of Companies and Associations (RESA) if they are a legal person.

Need assistance with these procedures?

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Sources: MyGuichet.lu