With effect from 1 January 2023 – and limited until 31 December 2023 – the following VAT rates apply in Luxembourg:
- The standard VAT rate drops from 17 per cent to 16 per cent,
- The average VAT rate drops from 14 per cent to 13 per cent
- Reduced VAT rate (especially for gas and electricity) drops from 8 per cent to 7 per cent
- The strongly reduced VAT rate of 3 per cent remains unchanged.
The measure serves to mitigate the current inflation. However, there is no explicit obligation to pass on the reduction to customers. Mainly, if a gross price were agreed upon, the provider’s margin would increase accordingly. Particular problems may arise in certain international constellations. Contracts running through the turn of the year 2022/23 and 2023/24 may also raise complicated legal issues under certain circumstances.
What are the VAT rates in Luxembourg?
In Luxembourg, there are four different VAT rates at which goods and services can be taxed. The standard rate is 17% and applies in most cases. There are also reduced rates of 14, 8 and 3%.
Regular VAT rates in Luxembourg
|Normal tax rate: 17|
|Reduced tax rate: 8|
|Highly reduced tax rate: 3%|
|Intermediate rate: 14%|
|Zero rate||Intra-Community and international transport|