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Luxembourg Reduces VAT Rates Temporarily and Extends Fuel Price Reduction Measures — Orbitax Tax News & Alerts

Luxembourg has published the Law of 26 October 2022 in the Official Gazette, which provides for a temporary reduction in VAT rates. This includes:

  • a reduction in the standard rate from 17% to 16%;
  • a reduction in the reduced rate from 8% to 7%; and
  • a reduction in the intermediate rate from 14% to 13%.

The VAT rate reductions apply for one year from 1 January to 31 December 2023.

In addition to the VAT rate reductions, the Law also includes measures to extend and amend the reduction of fuel prices that was introduced as part of the energy relief package earlier in the year. These measures generally apply with retroactive effect from 1 August 2022 until 31 December 2023.