VAT in Luxembourg

VAT Deduction Limits in Luxembourg

Input VAT is generally deductible as long as the goods or services are used for business purposes.  
There are no particular VAT deduction rules. Travel expenses, vehicles, including the fuel, business gifts, and training and conference tickets are 100% deductible if related to a business use. 
A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.  

Check the official information about input VAT deduction in Luxembourg. Also, Art. 48 of the Luxembourgish VAT Law regulates this topic.

Statute of Limitations in Luxembourg

The statute of limitations is five years in Luxembourg. However, there is an extended prescription period of ten years in case no return was filed. 
The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests.  
The statute of limitations also determines the period a taxpayer can voluntarily correct any errors on past submissions, as well as deduct input VAT. This is four years. A valid VAT invoice or customs document is required to claim for input VAT refund. 

You can find an overview of the statute of limitations in Europe under the following link 

Tax point rules in Luxembourg

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return. 

  • General rule: When the supply of goods or services is subject to the mandatory issuance of an invoice, then the tax point is by the of issuing the invoice. If you have not issued an invoice, then VAT is due by the time of the supply of the goods or services, or by the time a prepayments or advanced payment is received. 
  • Prepayment: when there is an obligation to issue an invoice and it is issued with the prepayment, then VAT is due before the 15th of the month following the month during which the transaction takes place. In case there is no obligation to issue an invoice, the tax point is at the time of receiving the prepayment. 
  • Continuous supplies of services: if the customer is liable to self-assess the VAT, then the VAT becomes due by the end of the calendar year.  
  • Intra-Community acquisitions and supplies: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier. 
  • Import: Tax point occurs when the goods are imported according to the relevant import documents.

This is regulated in Art. 24 of the Luxembourgish VAT Law

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