VAT registration in Luxembourg: deadlines, rates and the franchise regime

A company starting a taxable activity in Luxembourg has 15 days to file its initial VAT declaration (déclaration initiale) with the AED, whether or not it will charge VAT on its first invoice. The standard rate is 17%. Below €50,000 of annual turnover you may invoice without VAT under the small-business franchise, but you then deduct none of the VAT you pay. Returns run monthly, quarterly or annually depending on turnover. These rates and thresholds are the ones in force in 2026.

Once the company starts trading, the recurring work is the VAT registration and the periodic VAT returns filed through eCDF, alongside the bookkeeping.

See what monthly accounting includes, from €250

Who has to register for VAT, and by when?

Three situations put a business in front of the AED (Administration de l'enregistrement, des domaines et de la TVA):

• A taxable activity in Luxembourg. File the déclaration initiale within 15 days of starting, even if you expect to fall under the franchise.
• Supplies taxed in Luxembourg by a business established elsewhere. In general, any person not established or domiciled in Luxembourg who carries out supplies of goods or services whose place of taxation is deemed to be in Luxembourg must register for Luxembourg VAT — except businesses declaring those receipts under the One-Stop-Shop (OSS) regime.
• Purchases from EU suppliers by a non-taxable legal person. Intra-Community acquisitions above €10,000 a year bring the entity into the VAT system.

The 15-day clock runs from the day the activity starts, not from the first payment received, as guichet.lu's VAT registration page sets out. A company that waits for its first client to pay before filing can already be late.

What goes into the déclaration initiale?

The declaration goes in with a copy of the incorporation deed in French or German, plus a copy of the identity card or passport of the named partners appearing in the deed and/or of the company's managers and directors. The deed is an attachment, so incorporation comes first and VAT registration follows it, never the reverse.

The language requirement is what catches bilingual files. A file prepared in English for an investor's convenience needs its official-language version at registration, not afterwards.

What comes back is your VAT identification number: LU followed by a unique 8-digit group (intra-EU use); dealings with the AED use the 13-digit national matricule. That is one registration with two identifiers: your accountant quotes the matricule to the AED, while your invoices carry the LU number. Treat the number as a gating item for the first invoice, not as paperwork that catches up later.

What are the four VAT rates?

Luxembourg applies four rates, published in the AED's national rates table. The standard rate is the default, and the other three apply only to goods and services listed in the annexes to the VAT law.

Most service companies only ever meet the 17% rate, so check the annexes when you add a product line rather than assuming the rate follows the industry.

Undercharging is the costly mistake. You owe the difference to the AED, with no easy way to reclaim it from a customer who has moved on.

Is the franchise worth it below €50,000?

The franchise lets a small business invoice without VAT below €50,000 of annual turnover. A tolerance runs to €55,000 in the year the threshold is crossed. The trade runs both ways:

• You charge no VAT on sales, which keeps prices simple for consumer-facing work.
• You deduct no input VAT, so the VAT on your laptop, software, rent and services becomes a real cost.
• Business clients rarely care, because they deduct VAT anyway.

Register normally if your customers are businesses, since the franchise pays only when your buyers are private individuals who cannot deduct.

The franchise is not an exemption from admin. Every invoice carries the mention TVA non applicable – Article 57bis de la loi modifiée du 12 février 1979, and the other mandatory mentions are in our invoicing guide.

On the invoicing side, since 1 January 2025 a taxable person under the franchise regime may issue simplified invoices and may not show VAT on them. The previous year's turnover must also be declared to the AED before 1 March each year.

How often do I file, and when are returns due?

The AED sets your filing rhythm from annual turnover excluding VAT, using two thresholds: €112,000 and €620,000. The bands follow the guichet.lu VAT registration guidance.

The AED assigns your rhythm and can revise it as you grow. The deadline itself is fixed: monthly / quarterly returns due before the 15th of the month following the period, filed electronically via eCDF.

From the first period the AED assigns, preparing and filing the periodic VAT returns is a recurring duty. A missed return is the fastest route from routine obligation to penalties.

More frequent filing is not purely a burden. Exporters and B2B service companies selling abroad often reclaim input VAT, so monthly returns bring their cash back faster.

Below €500,000 of annual turnover, a business may opt to account for VAT on receipts rather than on invoices issued. For a young company whose clients pay slowly, that option stops it advancing their VAT out of its own account.

Which cross-border sales move where VAT is due?

Selling services to businesses elsewhere in the EU normally means reverse charge. Your invoice carries no Luxembourg VAT, the client self-accounts at home, and the sale appears in your recapitulative statements.

The wording the AED prescribes on that invoice is Autoliquidation, the French term rather than an English translation of it.

Goods sold to consumers in other member states follow a different rule. Above €10,000 of EU-wide distance sales a year, VAT is due in the destination country. The One-Stop-Shop (OSS) spares you registering in each of them. The threshold is low enough for a modest webshop to cross it unnoticed.

Once your sales go beyond Luxembourg B2B or simple EU B2B services, have the setup reviewed before the invoices go out, not after.

What should a new company do about VAT in year one?

Five actions cover the first year, in the order they fall due:

1. File the déclaration initiale with the AED within 15 days of starting activity, with the deed in French or German attached.
2. Choose franchise or normal registration based on who your customers are, with €50,000 of turnover as the ceiling.
3. Put the rhythm the AED assigns into your calendar, with a one-week buffer before each due date.
4. Set up your invoice template once with the mentions your regime requires, and keep issued and received invoices for 10 years.
5. Re-check the setup when you cross a turnover band, add a product at a different rate, or sell goods to consumers abroad past €10,000.