| Update: | Compliance Alert - VAT rates temporarily lowered to combat inflation |
| Date: | 2022-10-18 |
A verbal agreement across the government, employers and unions in Luxembourg has led to a temporary decrease in VAT rates in the jurisdiction.
The amended VAT rates, which entails a 1% drop in all categories, will apply from January 2023. The changes include:
- 16% (previously 17%) will apply to the sales of all goods and services that do not fit the criteria to adhere to any lower VAT rate.
- 13% (previously 14%) will apply to specific goods and services, such as:
- Certain financial services, namely in the management of securities;
- Various materials to be consumed as fuel, including solid combustibles and wood;
- Cleaning preparations, including detergent and more.
- 7% (previously 8%) will apply to specific goods and services, such as:
- Electricity
- Gas
- Heat from heating systems
- Bicycle repair and more.
The 3% reduced rate in Luxembourg will remain unchanged.