Enlighten your future Return to the normal version of VAT on January 1, 2024
Return to the normal version of VAT on January 1, 2024
The year 2023 was particular as a reduction in VAT was applied in accordance with the law of October 22, 2022.
Thus the rates applied in 2023 were as follows:
Normal rate: 16% instead of 17%
Intermediate rate: 13% instead of 14%
Reduced rate: 7% instead of 8%
Previous super-reduced rate: 3%
From January 1, 2024, VAT rates will therefore return to previous rates, the applicable rates will therefore be:
Standard rate: 17%
Intermediate rate: 14%
Tax reduction: 8%
Previous super-reduced rate: 3%
For operations carried out on national territory and which began in 2023, here are some details to know which VAT rates to apply :
With regard to a transaction carried out in favor of a final consumer (natural person not subject to VAT) :
- For an in-store sale to a final consumer: the date which determines the applicable VAT rate is the date of purchase
- For a service provided to a final consumer :
• if the service was provided in 2023, it will be invoiced with the VAT rate applicable in 2023 and regardless whether the invoice is issued in 2023 or 2024
• if the service is carried out in 2024, it will be invoiced with the VAT rate applicable in 2024
- for a sale of goods with delivery without deposit, it is the date of actual delivery of the goods which will determine the VAT rate to apply
- for a sale of goods with delivery with deposit, it is the date of the invoice for the deposit which determines the VAT rate applicable for the deposit. For the balance, the applicable VAT rate will be determined by the date of delivery of the goods.
- for works of construction or renovation of a house and if the customer has agreed to make it his/her main accomodation, the super-reduced rate of 3% applies within the framework of the “Housing VAT”
With regards to delivery of goods on Luxembourg territory to a legal entity subject to VAT or not :
In this case an invoice must be issued before the deadline of the 15th of the month following the month of receipt of the delivery.
If the invoice is issued before the deadline, it is the date of issue of the invoice which will determine the applicable VAT rate.
If the invoice is not issued before the deadline, the date which determines the applicable VAT rate is the 15th.
If it is a sale with deposits invoiced before receipt of the delivery, the date which will determine the VAT rate will be the date of issue of the deposit invoice.
With regards to the provision of services on Luxembourg territory carried out in favor of a legal entity subject to VAT or not :
In this case also an invoice must be issued on a deadline from the date of completion of the service:
- If the service is completed before December 2023, the date which determines the applicable VAT rate will always be in 2023 regardless of the date on which the invoice is issued.
- If the service is completed in December 2023, the date which determines the applicable VAT rate will be in 2023 if the invoice is issued before January 1, 2024
- If the service is completed in December 2023, the date which determines the applicable VAT rate will be in 2024 if the invoice is issued from January 1, 2024
In the case of provision of services with successive statements or payments, that is to say the provision of services of a continuous nature as in the case of chartered accountants: if invoicing is done periodically the provision of services is considered to be carried out at the expiration of the period to which it relates :
- If a service relates to an end of period before December 2023, the date which determines the applicable VAT rate will always be in 2023. The date of issue of the invoice will have no influence
- If a service relates to an end of period on December 31, 2023, the date which determines the applicable VAT rate will be in 2023, if the invoice is established before January 1, 2024
- If a service relates to an end of period on December 31, 2023, the date which determines the applicable VAT rate will be in 2024, if the invoice is issued from January 1, 2024
If advance payments are invoiced before the performance of the service, the date which determines the applicable VAT rate will be the date of issue of the advance invoice.
