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 intends to 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, at the price of deducting none of the VAT you pay. Below is the year-one picture: who must register, the four rates, the filing rhythm, and the thresholds that quietly change the answer.
Figures here were verified against the AED's national rates table and the VAT registration page on guichet.lu, and are the ones in force in 2026.
Who has to register, and by when
VAT is usually the first tax a new Luxembourg company meets in practice: it arrives with the first invoice, not with the first profit. Three situations put you in front of the AED:
- Starting a taxable activity in Luxembourg. File the déclaration initiale within 15 days of starting, even if you expect to fall under the franchise. The declaration is filed either way; it is the document that puts you on the AED's map.
- Supplying into Luxembourg without being established here. 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. That exception is the one to check first, and it is why an established OSS filer usually does not end up with a Luxembourg number at all.
- Buying goods from EU suppliers as a non-taxable legal person. Intra-Community acquisitions above €10,000 a year bring an entity into the VAT system that otherwise had no reason to be there.
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.
That document list is the one that catches bilingual files: the deed copy the AED wants is in French or German, so a file prepared in English for an investor's convenience needs its official-language version at registration, not afterwards. It also fixes the sequence — the deed is an attachment, so incorporation comes first and VAT registration follows it, never the reverse.
What you get 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. Founders routinely assume these are two different registrations. They are not — one file, two identifiers, and your accountant will quote the matricule to the AED while your invoices carry the LU number.
How long the AED takes to issue it is not something the official guidance states, so we print no timeline. Treat the number as a gating item for the first invoice rather than paperwork that catches up later.
The four Luxembourg VAT rates
Luxembourg applies four rates. The standard rate is the default; the other three apply only to goods and services listed in the annexes to the VAT law, which the AED publishes in full.
| Rate | Category | Applies to |
|---|---|---|
| 17% | Standard | any supply not listed in an annex |
| 14% | Intermediate | the goods and services in Annex C |
| 8% | Reduced | the goods and services in Annex A |
| 3% | Super-reduced | the goods and services in Annex B |
Most service companies only ever meet the 17% rate, which is why the rate question feels academic until a company sells something physical, or something cultural, or something to a landlord.
Rate errors are asymmetric: undercharging a client leaves you owing the difference to the AED with no easy way to reclaim it from a customer who has moved on, while overcharging shows up as a correction and an annoyed buyer. Check the annexes once, at the point you add a product line, rather than assuming the rate follows the industry.
The small-business franchise, with its actual numbers
The franchise lets a small business invoice without charging VAT below €50,000 of annual turnover, with a tolerance to €55,000. That sounds attractive, and for some side activities it is, but the trade runs both ways:
- You skip VAT on sales, which keeps prices simple for consumer-facing work.
- You cannot deduct input VAT, so the VAT on your laptop, software, rent and services becomes a real cost rather than a cash-flow item.
- B2B clients rarely care, because they deduct VAT anyway. The franchise mostly helps when your customers are private individuals.
Most growth-minded companies register normally: for a business buying services and equipment while selling B2B, deduction is worth more than the simplification. The arithmetic flips only when your buyers cannot deduct.
The franchise is also not an exemption from admin. Invoices must carry the mention TVA non applicable – Article 57bis de la loi modifiée du 12 février 1979, and 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.
There is an annual filing too: the previous year's turnover has to be declared before 1 March. Companies that chose the franchise to avoid paperwork tend to discover that deadline in its second year.
Filing frequency and when returns are due
How often you file depends on annual turnover, measured excluding VAT, and the AED works from two thresholds: €112,000 and €620,000.
| Annual turnover | Filing rhythm |
|---|---|
| Below the lower band | Annual return can suffice |
| Between the two bands | Quarterly returns plus an annual return |
| Above the upper band | Monthly returns plus an annual return |
Bands per the VAT registration guidance on guichet.lu; 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. Two practical notes. First, more frequent filing is not purely a burden — if you regularly reclaim input VAT, which is common for exporters and for B2B service companies selling abroad, monthly filing returns your cash faster. Second, missing an assigned deadline is the fastest way to turn a routine obligation into penalties and attention.
There is one cash-flow option most guides skip. Below €500,000 of annual turnover, a taxable person may opt to account for VAT on receipts rather than on invoices issued. For a young company whose clients pay slowly, that option decides whether you are financing your customers' VAT out of your own account until they settle.
Cross-border: the thresholds that move where VAT is due
Selling services B2B inside the EU normally means reverse charge: no Luxembourg VAT on the invoice, the client self-accounts at home, and the transaction appears in your recapitulative statements. The wording the AED prescribes on that invoice is Autoliquidation — the French term, not an English translation of it, which is the kind of detail that quietly needs correcting on a founder's first EU invoices.
Goods sold to consumers in other member states follow a different rule. Above €10,000 of EU-wide intra-Community distance sales a year, VAT is due in the destination country rather than in Luxembourg, and the One-Stop-Shop exists so that this does not mean registering in each of them. The threshold is low enough that a modest webshop crosses it without noticing.
The rule of thumb for a young company: the moment your sales stop being Luxembourg B2B or simple EU B2B services, have the setup reviewed before the invoices go out, not after. Reissuing invoices to correct a VAT treatment is possible; reclaiming the VAT you never charged from a customer who has already paid is a conversation.
Common questions
These are the questions that come up between the first invoice and the first return, when the registration choices made at the start start to bite.
Who has to register for VAT in Luxembourg?
Any person carrying out a taxable activity in Luxembourg; non-established suppliers whose supplies are taxed here, unless those receipts are declared under the One-Stop-Shop; and non-taxable legal persons making intra-Community acquisitions above €10,000 a year.
How long do I have to register?
You have 15 days from the start of activity to file the déclaration initiale with the AED. The deadline runs from starting the activity, not from receiving your first payment.
What does a Luxembourg VAT number look like?
LU followed by a unique 8-digit group (intra-EU use); dealings with the AED use the 13-digit national matricule. Both refer to the same registration.
Does the franchise mean no VAT paperwork at all?
No. You do not charge VAT and you cannot deduct it, invoices carry the mention TVA non applicable – Article 57bis de la loi modifiée du 12 février 1979, and the previous year's turnover has to be declared before 1 March.
When are VAT returns due?
Periodic returns run to a fixed calendar: monthly / quarterly returns due before the 15th of the month following the period, filed electronically via eCDF. An annual return follows the periodic ones in every rhythm above the smallest.
The year-one VAT checklist
- File the déclaration initiale with the AED within 15 days of starting activity, with the deed and identity documents attached in the form the AED asks for.
- Decide franchise versus normal registration on who your customers are, using the €50,000 threshold as the ceiling and not as a target.
- Put the rhythm the AED assigns into your calendar with a one-week buffer: monthly / quarterly returns due before the 15th of the month following the period, filed electronically via eCDF.
- Set your invoice template up once with the mentions the regime requires — the full list is in our invoicing guide — and keep issued and received invoices for 10 years.
- Re-check the setup when you cross a turnover band, add a product at a different rate, or start selling goods to consumers abroad past €10,000.
Sequence is what makes VAT easy or awkward: registration hangs off the incorporation deed, filing rhythm hangs off turnover, and invoice wording hangs off the regime you chose. Settle those three before the first invoice leaves, and the rest of year one is data entry.