Luxembourg: Bill including VAT measures presented to Parliament
Bill 8406, which includes value added tax measures, was submitted to the Parliament this summer.
September 5, 2024
Bill 8406, which includes the following value added tax (VAT) measures, was submitted to the Parliament this summer.
- Change in place of supply of virtual events provided to non-taxable persons: Under current Luxembourg VAT law, cultural, artistic, sporting, scientific, educational, entertainment, or similar activities provided to non-taxable persons is taxable at the place where the services are physically carried out. The new contemplated clause would introduce a provision for virtual events for which the place of supply is where the non-taxable person receiving the services is established, has his permanent address, or usually resides—which would harmonize the place of supply of virtual events supplied to non-taxable persons amongst Member States.
- Application of reduced 8% VAT rate to works of art, collectors’ items, or antiques and review of profit margin scheme: Currently, the reduced 8% VAT rate only applies on imports as well as domestic supplies of works of art, collectors’ items, or antiques performed by the creators or their successors in title. Under the new provisions, the reduced rate would apply to all supplies of such goods (including intra-community acquisitions), as well as their subsequent resale. However, when the reduced rate is applied, taxable resellers or a public auction organizers would no longer be able to opt for the profit margin scheme.
- Restructuring of special scheme for small enterprises: Replacing the current special scheme for small enterprises, only allowing for an exemption to be granted to businesses established in the member state in which the VAT is due, the new provisions would provide for two different schemes for small enterprises—one for businesses that conduct economic activity only in Luxembourg and another for businesses that also conduct economic activity in other member states.
The bill will now go through the usual legislative process and may be subject to changes. However, it is expected the bill will be enacted by and effective as of January 1, 2025.
Read a September 2024 report prepared by the KPMG member firm in Luxembourg