Luxembourg SME rules

SME Scheme – General features

Exemption

It is possible to opt for the SME scheme in Luxembourg.

Transactions excluded from the SME scheme

The following transactions and special schemes are excluded from the SME scheme: 

• Occasional transactions, like the supply before first occupation of a building or parts of a building or the supply of building land,
• Exempt cross-border supplies of new means of transport made from one Member State to another,
• Letting and leasing of immovable property if the taxable person has opted for taxation,
• VAT-grouping scheme

National annual threshold

The national annual threshold in Luxembourg is 50 000 EUR.

Luxembourg does not apply sectoral thresholds.

More information is available on TEDB.

Domestic SME scheme

Simplified VAT obligations

A small enterprise established in Luxembourg who applies the SME scheme in Luxembourg only (domestic SME scheme) is released from the following VAT obligations: 

• to submit periodical VAT returns, provided that this small enterprise has not carried out any supplies of services for which VAT is payable by the customer pursuant to Article 196 of directive 2006/112/CE and is not liable for VAT on transactions not covered by the SME scheme.

   

Cross-border SME scheme

The cross-border SME scheme applies in the following situation(s):

1. The small enterprise applies the SME scheme in other Member States than the Member State of establishment, or;
2. The small enterprise applies the SME scheme both in the Member State of establishment and in other Member State(s).

Simplified VAT obligations

The VAT registration in each Member State where the small enterprise applies the SME scheme is replaced by a single prior notification to be submitted in the Member State of establishment. 

The periodical VAT returns are replaced by a single quarterly report for all Member States to be submitted in the Member State of establishment. 

Currency

The values of supplies of goods and services to indicate in the prior notification, in the update to a prior notification and in the quarterly reports must be in EUR. 

Way of submission

The prior notification, the update to a prior notification and the quarterly reports should be submitted by electronic means on this page. (page under construction)

Additional simplified VAT obligations

Exempt small enterprises applying the cross-border SME scheme in Luxembourg are released from the following VAT obligations:

• to issue invoices for B2C supplies
• to issue full invoices for B2B supplies

Loss of simplified VAT obligations

Not applied

Transitional period

Luxembourg applies a transitional period in case the national annual threshold is exceeded during the current calendar year. 

If the national annual threshold is exceeded by not more than 10%, the exemption remains applicable until the end of the calendar year.

More information can be found in TEDB database.

Practical examples of the application of the transitional period and its consequences are available in the Explanatory Notes.
 

Quarantine

Quarantine period in case of exclusion from the SME scheme

Small enterprises excluded from the SME scheme in Luxembourg are not able to benefit from that exemption during the current year and the following calendar year. 

You can consult the quarantine period applicable in Luxembourg on TEDB database.

Practical examples on the application of the quarantine period and its consequences are available in the Explanatory Notes.

Quarantine period in case of voluntary departure from the SME scheme

Small enterprises who decide to voluntarily leave the SME scheme in Luxembourg are not able to benefit from that exemption during the current year and the following calendar year.

You can consult the quarantine period applicable in Luxembourg on TEDB database. 

Appeals

Domestic SME scheme

Appeals should be addressed to your Member State of establishment (MSEST).

Cross-border SME scheme

Member State of establishment (MSEST)

Appeals related to the following topics should be addressed to MSEST:

• Union annual turnover
• Prior notification, correction and update to a prior notification
• Quarterly reports and correction of a quarterly report
• Exclusion for exceeding the Union annual turnover

Member State of exemption (MSEXE)

Appeals related to the following topics should be addressed to MSEXE:

• National annual turnover
• Denial to access the cross-border SME scheme in MSEXE
• Loss of simplified VAT obligations in respect of MSEXE
• Exclusion for exceeding the national annual threshold/sectoral threshold in MSEXE

Calendar

VAT simplified procedures

Not applicable