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Monday, 08 April 2019

Luxembourg VAT updates

Brexit Newsletter from AED

The Registration Duties, Estates and VAT Authority (AED) has issued a Newsletter informing all taxpayers of VAT related consequences of a British exit from the European Union (EU) as from 29 March 2019, (in case no withdrawal agreement is agreed between the EU and the United Kingdom (UK).

Click here to access to the AED Newsletter:

In the meantime, the date of the withdrawal of the UK from the EU has been postponed until 12 April 2019.

We recommend Luxembourg companies that supply or receive services or goods to or from UK to assess the impacts of a Brexit in order to be prepared for the upcoming changes.

In particular, companies, operating in transactions in goods, should in case of Brexit, take into account customs aspects.

In addition, some VAT compliance duties will change, especially the filing of the recapitulative statements of goods and services that will no longer be required after the Brexit took place. Moreover, Luxembourg companies will no longer be able to declare transactions towards UK counterparts as from the withdrawal date. Thus, we recommend Luxembourg companies to file their recapitulative statements at the soonest before being blocked by the system VIES via which it will be impossible to check the validity of a UK VAT client number as from 12 April 2019.

We can help Luxembourg companies by reviewing their flows of transactions with UK and help to monitor the VAT obligations in Luxembourg.


VAT measures foreseen in the Budget Bill for 2019.

On 4 March 2019, the Luxembourg government presented its draft 2019 budget law to its parliament.

This draft budget law includes some tax measures, which the government had already announced when it presented its coalition agreement on 3 December 2018.

Here our newsletter that refers to the corporate tax measures:

In respect of VAT, there are three measures foreseen in the bill:

The first VAT measure concerns the application of the super-reduced VAT rate (3%) to e-books, electronic publications and online press. This measure leads to apply the super-reduced VAT rate (3%) to all publications regardless the format used (paper or electronic format). This measure is also in line with the Directive (EU) 2018/1713 from 6 November 2018.

  • N.B.The application of the super-reduced VAT rate to e-books is not new in Luxembourg. Indeed, VAT rate of 3% was applicable in Luxembourg until Luxembourg was condemned by the Court of Justice of the European Union in 2015 (C-502/13). The court judged that Luxembourg had failed to fulfil its obligations under the EU Directive by applying a VAT rate of 3% to digital or electronic books, the reduced rate being at that time only allowed for books on a paper format.

Some uncertainties remains regarding the qualification of electronic publications of certain publications, especially for audio books. Would they also qualify as being electronic publications and thus be subject to the super reduced VAT rate? This is a point of discussion for which some clarifications is still to be obtained. A topic to be followed.

In addition to this, it has also been announced that the super-reduced VAT rate should also apply to essential hygienic items (i.e. tampons and sanitary pads).

Finally, plant protection products authorized for organic agriculture should benefit from the application of the reduced VAT rate of 8%.

These VAT measures should apply as from 1 May 2019.


Michiel Boeren - Counsel (

Sylvie Eiras de Sa - Senior Associate (

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