Both companies and individuals are subject to VAT registration in Luxembourg provided that they undertake an economic activity. Foreign investors seeking to open companies in Luxembourg must know that VAT registration is an essential step of the company formation process. In 2015, Luxembourg has also brought several changes to the VAT rates. The standard rate is now 17%, while the reduced rates are 14% for several financial services, and 12% for the supply of electricity and gas.
Our law firm in Luxembourg can assist foreign enterprisers to set up companies here.
In Luxembourg, the registration for VAT is mandatory for the following entities:
Our attorneys in Luxembourg can offer more information on companies exempt from registering for VAT in this country.
The registration for VAT must be made within 15 days after the commencement of the activity for the taxable persons who are not exempt from registration or before the first day of the month following that in which the threshold is exceeded.
For the entities which are not subject to VAT but are willing to register the process must be made prior to the completion of the following:
Before registering for VAT, companies must have a bank account from a foreign or Luxembourg bank. In order to register for VAT, the taxable person must submit a declaration to the competent tax office. For legal entities, the initial registration application must be accompanied by a copy of the incorporation documents in French or German and a copy of the identity card (or passport) of associates name in the constitution and / or managers, directors of the company.
Once registered for VAT, the applicant receives an identification number for VAT composed of a group of identical and unique 8 digits preceded by the letters "LU". The identification number for VAT purposes is used in intra-community operations.
In certain situations, the VAT can be refunded. These situations may appear if the legal entity is not eligible to pay VAT in Luxembourg or if it didn’t have its place of business in Luxembourg in the period of refund. The application for VAT refund must contain a minimum amount of 400 EUR for a period of minimum three months and not higher than one year or 50 EUR.
The companies from a non-EU country must submit the VAT refund application with the local tax office, but they may not file a claim with an amount lower than 250 EUR and for a period not equal to one year.
If received, the refund is paid no later than 10 days from the decision. For complete information, please contact our lawyers in Luxembourg.
There are no comments