How vat / sales tax works in Luxembourg
Luxembourg VAT defaults to 17%, with 14% on wines, fuels, and detergents, 8% on energy, hairdressing, and plants, and 3% on food, books, medicines, transport, stays, and housing works.
Traders file through eCDF on monthly, quarterly, or annual rhythms by turnover, with the 2023 one-point cut fully expired and 16% templates now simply wrong.
Small businesses below EUR 50,000 stay outside the system without input recovery, while OSS routes EU distance sales and reverse charge covers B2B imports.
Tax rates at a glance
- Standard VAT
- 17%
- Reduced VAT
- 14% / 8% / 3%
- Restaurant meals
- 3%
- Alcohol served
- 17%
- Exemption track
- EUR 50,000
- Filing system
- eCDF
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersSaaS foundersFreelancersExpatsHospitality operators
Watch out for
- Stale 16% templates from the 2023 cut under-collect on every invoice, creating systematic liability that audits price with interest.
- Restaurant bills split 3% food against 17% alcohol, and identical renovation work switches bands by property use.
- Exempt-track traders lose input recovery, which penalises input-heavy startups that elect shelter for simplicity.
- Reverse-charge misconfiguration on intra-EU B2B sales is the classic cross-border error, caught by recapitulative-statement matching.
Frequently asked questions
What is the VAT rate in Luxembourg?
Luxembourg applies 17% standard VAT in 2026, with 14%, 8%, and 3% bands covering wines, energy, food, books, transport, stays, and housing works.
Is 16% VAT still valid in Luxembourg?
No. The 16% rate was a 2023-only anti-inflation cut. Since January 2024 the standard rate is back at 17%, and old templates must be updated.
Do small Luxembourg businesses charge VAT?
Not below EUR 50,000 under the exemption track, though exempt traders cannot deduct input VAT. Standard filing runs through eCDF by turnover rhythm.