Out-Law News

Lower VAT rates to apply in Luxembourg in 2023

Most rates that VAT is charge at in Luxembourg are to be temporarily lowered in 2023. The measures are designed to help businesses and consumers cope with the costs of high inflation.

Under Luxembourg’s VAT laws, different rates of VAT are charged depending on the type of goods or services sold.

A reduced VAT rate of 8% is currently charged on the supply of electricity and liquefied petroleum gas, as well as on district heating and on residential cleaning services, for example. That rate will be lowered to 7% next year.

Another reduced VAT rate of 14% currently impacts services such as the administration of securities and certain credit guarantees, as well as the supply of printed advertising materials and the sale of cleaning products and certain wines, among other things. That rate will be lowered to 13% next year.

The standard VAT rate of 17% impacts most other taxable goods and services. It will be lowered to 16% in 2023.

There will be no change to the lowest VAT rate charged on goods and services in Luxembourg – the 3% VAT rate applies to things like food, soft drinks, passenger transport services, medicine, concert or theatre tickets, water and wastewater treatment services, and some construction works, among other things.

The changes were ratified by the Council of State last month and will take effect from 1 January 2023 until 31 December 2023.


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