Reduced VAT rates for Luxembourg in 2023


Reduced VAT rates for Luxembourg in 2023

The Luxembourg government decided to temporarily reduce some of the VAT rates this year to mitigate the effects of inflation and help business and consumers.

In practical, the different rates will be changed as follows:

 2022 ratesTemporary reduced ratesServices / Products
Standard rate17%16%All services and products where reduced rates are not applicable.
Average rate14%13%advertising pamphlets, management and safekeeping of securities…
Reduced rate8%7%Electricity, gas…    
Super-reduced rate3%3%food, transport services, medicine, concert or theatre tickets, water…

Although this measure seems simple in essence, its practical implementation implies certain questions and challenges for companies and businesses.

The Luxembourg VAT rules related to the chargeable event and the chargeability of VAT should be taken into consideration before they amend accordingly their accounting systems. This change also means that companies and businesses need to adapt their IT systems and invoicing templates to apply the new VAT rates as well as their services agreements.

Magali Micheletti from Auren Luxembourg