Luxembourg: VAT Groups Introduced

Luxembourg introduces VAT Group regime.

Luxembourg VAT Groups


Earlier this year, the Luxembourg Finance Minister announced the introduction of VAT Groups as a quick reaction to the recent ECJ cases on cost-sharing arrangements (Independent Groups of Persons - IGPs).

Draft Bill No. 7278 was voted in on July 26th 2018 by the Luxembourg Parliament, introducing the VAT group into their legislation. The law came into force on August 1st 2018.

The introduction of the VAT group is a major step forward for VAT law in Luxembourg, considering that 17 of the European Member States have implemented it into their national law.

Under the new rules, two or more persons established in Luxembourg that are closely connected by economic, financial and organisational links can be treated as a single taxpayer for VAT purposes. Members of the VAT group are considered as forming one taxable person, therefore any supplies of goods and services performed between it's members will be treated for VAT purposes as “self-supplies” - VAT-free transactions.

In other VAT news, the German Ministry of Finance recently approved a bill for an Annual Tax Act 2018 (Germany Approved Tax Bill).

Are you registered for VAT correctly in your company's global locations? If you need to speak to VAT experts to find out more, get in touch below.

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