Luxembourg’s e-invoicing mandate takes shape

On 30 July 2026, the Luxembourg government released a draft bill amending the law of 16 May 2019 on electronic invoicing (the “2019 Law”) and the VAT law of 12 February 1979 (the “VAT Law”). This bill significantly expands the scope of mandatory e-invoicing in Luxembourg beyond public procurement. It introduces a structured e-invoicing mandate for domestic business-to-business (B2B) transactions, in addition to the existing business-to-government (B2G) framework. It draws on the flexibility granted to Member States under the EU’s VAT in the Digital Age (ViDA) package and represents Luxembourg’s first national step towards the EU-wide digital reporting requirements which will apply to cross-border B2B transactions from 1 July 2030.

The bill will now follow the ordinary legislative process, including notably the opinion of the Council of State and of the relevant professional chambers, before it can be adopted and enter into force.

Background: ViDA and the current Luxembourg e-invoicing regime

The ViDA package was formally adopted by the Council of the EU on 11 March 2025 and entered into force on 14 April 2025. The ViDA package introduces three key pillars:

E-invoicing and Digital Reporting
Platform Economy
Single VAT registration

Under the first pillar, as from 1 July 2030, businesses will need to issue structured e-invoices for cross-border B2B transactions within the EU. These invoices will generally need to comply with the European standard, although Member States may permit the use of alternative formats subject to certain conditions. They will also have to be issued within 10 days of the relevant transaction or payment, whichever occurs first.

Against this background, the draft bill would significantly broaden the scope of Luxembourg’s existing e-invoicing framework. To date, the 2019 Law has only required e-invoicing for public procurement and concession contracts, namely in a B2G context.

Key changes introduced by the bill

Extended scope including domestic B2B

The bill extends the scope of the 2019 Law so that it applies to invoices:

issued by taxable persons established in Luxembourg to recipients also established in Luxembourg, for supplies of goods and services which place of taxation is in Luxembourg, or
issued in the context of public procurement and concession contracts (existing B2G perimeter, maintained).

In practice, purely domestic B2B transactions between Luxembourg-established taxable persons will fall under the e-invoicing mandate, alongside the existing B2G scope, provided the transaction is subject to an invoicing obligation under the VAT Law. Certain categories remain excluded, including specific occasional transactions carried out by private individuals, some VAT exempt financial and insurance services and certain B2C distance sales, in accordance with the relevant provisions of the VAT Law.

Updated definition of acompliant electronic invoice

The draft bill amends article 63 of the VAT Law to clarify and tighten the legal framework applicable to electronic invoices.

A compliant electronic invoice will need to be issued, transmitted and received in a structured electronic format that enables automated processing. It must comply with the European e-invoicing standard and use one of the approved syntaxes published under Directive 2014/55/EU. In mirror, documents that amend a compliant e-invoice, such as credit notes, will be treated in the same way, provided they refer clearly and unambiguously to the original invoice. They will therefore also need to be issued in the required structured format.

The draft bill also removes the need to obtain the recipient’s prior consent where compliant e-invoicing becomes mandatory. In particular, consent will no longer be required where a taxable person established in Luxembourg issues a compliant e-invoice to another Luxembourg-established taxable person. This change aligns the Luxembourg framework with the flexibility introduced under ViDA.

Obligations to issue,transmit, receive and process compliant e-invoices

Obligation to issue and transmit compliant e-invoices

The draft bill requires in-scope issuers (including economic operators, taxable persons, the State, communes and certain public bodies) to issue and transmit their invoices as compliant e-invoices. They should also be able to receive and process return messages transmitted by the recipient through the common delivery network (e.g. acknowledgment of receipt or rejection notices). Only the compliant structured e-invoice will have legal value as the invoice. While supporting documents may be attached, they will not qualify themselves as invoices.

Obligation to receive and process compliant e-invoices

From 1 January 2028, businesses and other in‑scope recipients established in Luxembourg will be required to receive and process compliant electronic invoices. The reception obligation will therefore apply to contracting authorities and entities as well as taxable persons.

In practice, recipients will no longer be able to reject an invoice solely because it is issued in a compliant structured electronic format. They will also need to integrate such invoices into their usual internal processes, including notably verification, approval, payment and accounting.

Ordinary B2C transactions (between a business and a non-taxable person i.e. an individual) remain outside the mandatory scope of the bill. Private individuals may still receive structured e‑invoices on a voluntary basis if both parties agree, but they are not generally subject to the new e‑invoicing obligations.

Common delivery network

In principle, the invoices will be exchanged through a common delivery network (“réseau de livraison commun”). Although the draft bill does not identify the underlying technical infrastructure, the system is expected in practice to build on the Peppol network already used for B2G e-invoicing in Luxembourg.

The draft bill does not amend the general VAT invoicing deadline. Therefore, invoices must still generally be issued no later than the 15th day of the month following the month in which the chargeable event occurred, or upon receipt of an advance payment, where applicable.

Obligation to issue and transmit compliant e-invoices Obligation to receive and process compliant e-invoices Common delivery network

Obligation to issue and transmit compliant e-invoices

The draft bill requires in-scope issuers (including economic operators, taxable persons, the State, communes and certain public bodies) to issue and transmit their invoices as compliant e-invoices. They should also be able to receive and process return messages transmitted by the recipient through the common delivery network (e.g. acknowledgment of receipt or rejection notices). Only the compliant structured e-invoice will have legal value as the invoice. While supporting documents may be attached, they will not qualify themselves as invoices.

Obligation to receive and process compliant e-invoices

From 1 January 2028, businesses and other in‑scope recipients established in Luxembourg will be required to receive and process compliant electronic invoices. The reception obligation will therefore apply to contracting authorities and entities as well as taxable persons.

In practice, recipients will no longer be able to reject an invoice solely because it is issued in a compliant structured electronic format. They will also need to integrate such invoices into their usual internal processes, including notably verification, approval, payment and accounting.

Ordinary B2C transactions (between a business and a non-taxable person i.e. an individual) remain outside the mandatory scope of the bill. Private individuals may still receive structured e‑invoices on a voluntary basis if both parties agree, but they are not generally subject to the new e‑invoicing obligations.

Common delivery network

In principle, the invoices will be exchanged through a common delivery network (“réseau de livraison commun”). Although the draft bill does not identify the underlying technical infrastructure, the system is expected in practice to build on the Peppol network already used for B2G e-invoicing in Luxembourg.

The draft bill does not amend the general VAT invoicing deadline. Therefore, invoices must still generally be issued no later than the 15th day of the month following the month in which the chargeable event occurred, or upon receipt of an advance payment, where applicable.

Next steps

Luxembourg is moving towards a broad, structured e-invoicing mandate for domestic B2B and B2G transactions, built around a common delivery network and a standardized e-invoice format.

The first obligations are expected to apply from 1 January 2028, when all in-scope recipients established in Luxembourg will need to be able to receive and process compliant e-invoices. Transitional technical solutions will remain available during 2028 for businesses falling within the new domestic B2B scope, with the applicable deadline depending on their size. These solutions do not remove the obligation to be able to receive compliant e-invoices from 1 January 2028 and only aim at provide alternative ways to comply during the transition period.

The obligation to issue and transmit compliant e-invoices will however be introduced in three phases:

from 1 January 2028 for large businesses;
from 1 July 2028 for medium-sized businesses; and
from 1 January 2029 for all other businesses.

Business size criteria are defined by reference to the balance sheet (EUR 7.5m), turnover (EUR 15m) and headcount (50 FTEs) assessed based on the 2026 financial statements.

The common delivery network is intended to become the standard channel for automated e-invoicing. However, the draft bill also provides for alternative solutions, including manual issuance tools, temporary reception solutions during the transition period and a permanent de minimis regime for businesses with a limited volume of in-scope invoices. The relevant volume thresholds and certain technical details will be set by Grand-Ducal regulation.

Although the implementation dates may appear distant, the reform is likely to require significant changes to invoicing, accounting and IT systems, as well as to internal controls and accounts payable and receivable processes. Businesses operating across several EU Member States will also need to consider foreign local requirement and how the Luxembourg requirements will interact with the broader ViDA digital reporting framework from 2030.

With the publication of the draft bill, the introduction of mandatory electronic invoicing in Luxembourg is no longer a question of if nor when. For many Luxembourg businesses, the new obligations will apply in less than 17 months, leaving limited time to assess the impact on existing processes, systems and data flows, select and implement the right solution.

Organisations should therefore start preparing now by evaluating how the new requirements will affect their finance, tax and IT functions, defining a clear implementation strategy and establishing a realistic roadmap to achieve compliance within the required timelines. Experience from other jurisdictions shows that electronic invoicing projects typically require significant lead time and cross-functional coordination.

KPMG Luxembourg combines deep VAT technical knowledge with technology and transformation expertise to help businesses assess the impact of the new rules, design an effective e-invoicing roadmap and support implementation. If you would like to discuss how the upcoming changes may affect your organisation, please do not hesitate to get in touch.