Place of supply of services: Luxembourg VAT

How is the place of supply of services in Luxembourg determined?

The place of supply of services in Luxembourg is determined in two steps: you first check whether the service falls within an exception and only then, failing that, apply the general rule, which places the supply at the customer where the customer is a taxable person and at the supplier where it is not.

What this determination settles is the scope of the tax itself. The indirect tax portal puts it bluntly: where the place of a service is in the Grand Duchy, the transaction is either taxed or exempt; where that place is abroad, the service falls outside the scope of Luxembourg VAT. The same reasoning runs the other way for a foreign supplier, who must register in Luxembourg where the place of taxation of its transactions is deemed to be there.

The order of the test matters more than it appears, and this is where we see most errors when taking over a file. An architect's service on a building in Belgium, the organisation of a trade fair in Frankfurt or the hire of a van for a week are not handled with the general rule: the exceptions attach them respectively to the location of the building, the place of the event and the place where the vehicle is taken over. The error does not show on the invoice issued; it shows on audit, when it turns out the tax was due in another Member State.

The framework is article 17 of the amended law of 12 February 1979 on value added tax, which transposes articles 44 and following of Directive 2006/112/EC. Its paragraph 1 carries the two general rules, its paragraph 2 the list of exceptions. The practical consequences then show up in the VAT return, where an out-of-scope transaction and an exempt transaction are not reported in the same way.

What is the general rule between taxable persons (B2B)?

The general B2B rule places the supply at the customer: the tax is due in Luxembourg where the taxable customer has established its business there, or where the fixed establishment to which the service is supplied is located there.

The hierarchy of connecting factors is precise and reads in article 17, paragraph 1. The place where the customer has established its business comes first. A fixed establishment prevails where the service is supplied to that establishment, which covers the common case of a group whose seat is in one State and whose receiving branch is in another. Failing a seat and a fixed establishment, the connecting factor is the customer's permanent address or usual residence. Directive 2006/112/EC lays down the same rule in its article 44.

The immediate consequence is that the person liable changes. The indirect tax portal states it in terms that leave no margin: the customer is obliged to apply the reverse charge mechanism where the service is supplied to it by a taxable person not established in the same Member State. That is the mechanism we set out in our article on the VAT reverse charge, and it is not a facility: it is an obligation of the customer.

Two points prevent hasty readings. First, an invoice issued without VAT because the place is at a foreign customer is not an exempt invoice: the transaction is taxed, simply elsewhere and by another person liable. Second, article 67 of the VAT law makes every person party to the taxable transaction, other than a final non-taxable consumer, jointly liable for payment of the tax together with its debtor. A supplier who has wrongly determined the place is therefore not safe on the sole ground that the tax fell on the customer.

What is the general rule for a supply to a non-taxable person (B2C)?

The general B2C rule reverses the connecting factor: a service supplied to a non-taxable person is taxed where the supplier has established its business, hence in Luxembourg where that supplier is established there.

The text provides the same correction as for B2B, but on the supplier's side: where the service is supplied from a fixed establishment of the supplier, the place becomes that of that establishment. Directive 2006/112/EC carries this rule in its article 45. In practice, a firm, a consultant or an agency established in the Grand Duchy therefore charge Luxembourg VAT to their private customers, whether those customers live in Luxembourg, France or Germany.

This apparent symmetry hides the real B2C issue, which is the weight of the exceptions. Most services actually sold to private individuals fall into an exception category: work on immovable property, admission to an event, restaurant services, transport, vehicle hire, electronically supplied services. By volume, the general B2C rule therefore governs only a minority of supplies to private customers.

Telecommunications, broadcasting and electronically supplied services to non-taxable persons are the best-known illustration: the place is where the customer is established or resides, with the turnover threshold and the one-stop-shop scheme we cover in our article on the VAT one-stop shop and e-commerce. VAT circular no. 789 of 2 November 2018 frames that scheme.

Which exceptions override the general rule?

The exceptions to the place of supply of services in Luxembourg target services whose economic connection is physical: they sit in paragraph 2 of article 17 of the VAT law and apply before any search for the general rule.

The immovable property exception is the broadest. The place of supply of services connected with immovable property is where that property is located, and the indirect tax portal specifies that this exception covers supplies made to taxable persons as well as to non-taxable persons. It therefore covers the architect, the surveyor, the estate agent and work on the building, and it produces its costliest effect where a Luxembourg supplier works on a foreign building without asking itself about local registration.

Three further families attach to the place of physical performance. Cultural, sporting, educational and similar events are taxed where they actually take place. Restaurant and catering services are taxed where they are physically carried out, with a separate rule on board ships, aircraft and trains during intra-EU passenger transport, where the place is that of the departure of the transport. Transport and activities ancillary to transport, such as loading or handling, likewise follow their place of performance.

Hire of means of transport is settled on duration. Short-term hire means continuous possession or use over a period not exceeding thirty days, extended to ninety days for means of maritime transport; VAT circular no. 753 specifies that the place is then where the customer physically takes possession of the vehicle. For long-term hire to a non-taxable person, the place is where that person is established, has a permanent address or usually resides.

How is the customer's status established before invoicing?

The customer's status governs the place of supply, and it is for the Luxembourg supplier to establish it: Implementing Regulation (EU) No 282/2011 allows the supplier to presume taxable status where it holds a VAT identification number whose validity it has verified.

Article 18 of that regulation sets out three presumptions. For a customer established in the Union, the supplier may presume taxable status where it has received the customer's individual VAT number and obtained confirmation of its validity together with the corresponding name and address, carrying out verification of a reasonable scale through normal commercial security measures such as identity or payment checks. A variant covers the customer who has not yet received a number but states that it has applied for one, the supplier then having to obtain other proof of that status.

The second presumption runs the other way: unless it has information to the contrary, the supplier may treat a customer established in the Union as a non-taxable person where it can show that the customer has not communicated its individual VAT number. The version consolidated at 1 July 2022 adds an exception for telecommunications, broadcasting and electronically supplied services, where the customer may be treated as non-taxable as long as it has not communicated a number, even where there is information to the contrary.

The third presumption covers customers outside the Union: a certificate from the tax authorities confirming entitlement to a VAT refund or, failing that, the VAT number or an equivalent number from the customer's country, in both cases with the same reasonable verification.

On engagements, what makes the difference is not the check but its trace. A number valid today proves nothing about a service invoiced eighteen months ago, and we regularly see files where validity was never kept other than in someone's memory. Checking a VAT number in VIES is therefore documented by a dated capture, filed with the invoice, for the retention period of accounting records.

What changed on 1 January 2025 for virtual events?

Since 1 January 2025, virtual admission to an event is no longer taxed in Luxembourg where the event takes place: Directive (EU) 2022/542 attaches those supplies to the place where the non-taxable customer is established, has a permanent address or usually resides.

The European mechanics come down to two amendments. Article 53 of Directive 2006/112/EC, which taxes admission to events where they take place, receives a paragraph excluding that connecting factor where attendance is virtual. Article 54(1) receives a mirroring subparagraph placing services streamed or otherwise made virtually available at the place where the non-taxable customer is established, has a permanent address or usually resides. Member States have applied those provisions since 1 January 2025, and the consolidated text of the directive published on EUR-Lex carries that wording.

On the Luxembourg side, the law of 20 December 2024 amending the amended law of 12 February 1979 transposes, among others, article 1, points 1), 2), 7), 12), 16) and 20) of Directive (EU) 2022/542, for application on 1 January 2025. The coordinated text of the VAT law at 1 January 2025 published by the Administration de l'enregistrement, des domaines et de la TVA carries the exception for virtual attendance within the rule on admission to events.

Two points remain open, and it is better to know this before pricing an event. In its opinion on bill 8406, the Chamber of Commerce notes that the authors of the bill do not specify the treatment of hybrid events, where some participants attend in person and others remotely.

It also points out that Luxembourg did not take the option of aligning the rate for online events with the rate for the same events held live, which leads an organiser to distinguish online participants from those physically present at one and the same event. Both observations come from the Chamber of Commerce, not from the tax authorities; they describe an unsettled point, not a rule.

What reporting obligations follow from the place of supply?

The place of supply governs the reporting obligations: a B2B service attached to a customer established in another Member State, and therefore outside the Luxembourg scope, must appear on a recapitulative statement in addition to the VAT return.

The frequency is in principle monthly. Guichet.lu states that recapitulative statements for intra-Union supplies of services must be filed monthly, the taxable person being free, however, to choose to file them quarterly. Filing goes through the financial data collection platform, eCDF, for statements relating to periods after 2017.

On the deadline, two official pages do not say the same thing, and we flag that rather than settle it in their place. The Guichet.lu page on recapitulative statements of goods and services gives filing before the twenty-fifth day of the month following the reporting period. A page of the indirect tax portal gives the fifteenth day of the following calendar month or quarter, the twenty-fifth day applying where electronic filing is mandatory or chosen. The prudent practice is to take the earlier date applicable to your filing method, and to have the deadline confirmed by the authorities for high-volume files.

The small business scheme does not remove those statements. A taxable person under the small business exemption who makes intra-Union supplies of services remains required to provide the recapitulative statements for those supplies, and files a simplified annual return before 1 March of the following calendar year through eCDF. A foreign supplier, conversely, must apply for VAT registration as soon as the place of taxation of its transactions is deemed to be in Luxembourg, subject to the one-stop shop.

Sources and verification

Written for Financial Services Luxembourg and reviewed before publication by Mickaël LOC, licensed accountant (authorisation 10077274). Every source cited below was read on 25 October 2026, the date that governs the state of the law presented in this article.

Luxembourg law: the page "Détermination du lieu de la prestation d'un service" of the indirect tax portal, for the scope principle, the two general rules, the customer's reverse charge obligation and the immovable property, event and restaurant exceptions; the coordinated texts of the amended law of 12 February 1979 on value added tax published by the Administration de l'enregistrement, des domaines et de la TVA, including the version at 1 January 2025, for article 17 and for the exception based on virtual attendance;

article 67 of the same law for joint liability; VAT circulars no. 753, for the place of taking possession in a short-term hire, and no. 789 of 2 November 2018, for electronically supplied services to non-taxable persons; the pages "Prestations de services" and "États récapitulatifs de biens et services" of Guichet.lu, together with the pages "État récapitulatif" and "Déclarations de TVA" of the indirect tax portal, for the reporting obligations; the law of 20 December 2024 on Legilux, for the transposition of Directive (EU) 2022/542.

European law: articles 44, 45, 53 and 54 of Directive 2006/112/EC in their consolidated text on EUR-Lex, Council Directive (EU) 2022/542 of 5 April 2022 and article 18 of Implementing Regulation (EU) No 282/2011 in its version consolidated at 1 July 2022. Non-administrative source, cited as such: the opinion of the Chamber of Commerce on bill 8406.

Four points could not be verified and are therefore not asserted here. First, the Luxembourg official domains are blocked by the network proxy of our editorial environment: these pages were read through indexed extracts obtained from searches restricted to official domains, with no extrapolation. Second, the exact numbering of the points of paragraph 2 of article 17 in the text in force: the extracts read come from coordinated versions of different years, and no point number is cited in this article.

Third, the point of article 26 designating the customer as the person liable for the tax on services it receives: it was found only in a coordinated version from 2011, the reverse charge obligation itself being confirmed by the indirect tax portal. Fourth, the filing deadline for recapitulative statements, two official pages diverging between the fifteenth and the twenty-fifth day, and the treatment of hybrid events, which the Chamber of Commerce reports as unsettled by the authors of the bill.

You can check each of those points against the coordinated text published by the Administration de l'enregistrement, des domaines et de la TVA and, for the deadline applicable to your file, by a written request to that authority.

This article sets out the state of the law at the date of publication and is not personalised advice: determining the place of a supply depends on the exact nature of the service, on the status and location of the customer and, where relevant, on the location of the immovable property or of the event concerned, and is settled with your licensed accountant. Report an error to contact@financialservices.lu: the correction is dated in the article.