VAT refund in Luxembourg: VAT credit, foreign business, deadlines.

How do you recover a VAT credit when your company is established in Luxembourg?

Repayment is requested from the AED: a taxable person holding a credit files a request for repayment of the excess, in its VAT return or, where the request does not accompany a return, by registered mail (article 55 of the VAT law). The authority repays the amount after deducting any sum still owed under the VAT law: an arrear, a fine or a missing return is set off before payment. A company whose filing record is not up to date therefore sees its refund blocked or reduced, which is the logic behind our page on the regularisation of late tax filings.

Without a request, the excess is carried forward to the next period: that is the default rule, and it is what happens if you do nothing. The credit is then absorbed at the pace of your output VAT. For an exporter, a provider invoicing mostly under the intra-community reverse charge or a company in an investment phase, that pace is too slow: the credit grows and finances the State out of your cash, which is what justifies the repayment request.

We first check that the credit is real and defensible: compliant invoices, an established right of deduction, a correctly applied pro rata for mixed activities, and returns filed through eCDF as VAT returns have required since 2020. A request filed on a fragile credit triggers an information request, sometimes an audit, and delays payment by several months.

How long does the AED take to refund a VAT credit?

The authority must notify its decision within four months of receiving the repayment request. If it asks for further information, the total period is six months at least. Once the request is accepted, repayment is made at the latest within ten working days after the decision deadline expires. These three figures sit in article 55 of the amended law of 12 February 1979.

Exceeding those deadlines has a consequence for the authority: it owes the taxable person interest computed on the balance to be repaid. Conversely, the absence of a decision within six months may be treated by the taxable person as a rejection, which opens the way to an appeal. An express rejection is challenged by an appeal within three months.

In practice, the actual time depends on the quality of the file and on the consistency between your returns, your accounts and your recapitulative statements. A file whose intra-community flows are documented and whose VAT number checks on customers are archived rarely prompts a request for further information. The deadline is won on that preparation, not on follow-up calls.

How does a business established in another Member State recover Luxembourg VAT?

A business established in another Member State, not established in Luxembourg and having made no taxable supplies there during the period, apart from the listed exceptions such as supplies on which VAT is due by the customer, recovers Luxembourg VAT under the procedure of Directive 2008/9/EC, transposed in article 55bis of the VAT law. It does not approach the AED: it files its claim on the electronic portal of the tax authority of its own State of establishment, which checks it and forwards it to Luxembourg.

The claim must be submitted by 30 September of the calendar year following the refund period. The period covered may not be shorter than three calendar months, unless it is the remainder of a calendar year, nor longer than one calendar year. The amount claimed may not be less than EUR 400 for a period of at least three months and less than one year, nor less than EUR 50 for a calendar year or the remainder of a calendar year.

The AED decides within four months of receiving the claim. If it asks for original documents, the period is extended by two months. The claimant has one month to reply to a request for information. Where the claim is approved, payment follows within ten working days after the decision deadline, and late-payment interest is due if the authority misses those deadlines.

The point to watch is the condition on the absence of taxable supplies in Luxembourg. A business that delivered goods there from a local stock, or carried out operations not covered by the reverse charge, is no longer within Directive 2008/9/EC: it must register and recover its VAT through its returns, which we cover on the VAT fiscal representative page.

How does a non-EU business obtain a refund of Luxembourg VAT?

A business established outside the European Union falls under article 55ter of the VAT law, which implements the Thirteenth Directive 86/560/EEC. The procedure remains paper-based: the official AED form, completed in French, German or English, is sent to Bureau d'imposition 11, B.P. 31, L-2010 Luxembourg, together with the original invoices or import documents and a certificate from the competent authority of the country of establishment confirming the status of taxable person.

The claim covers a full calendar year and must concern a total VAT amount of at least EUR 250. It must be filed by 30 June of the calendar year following the refund period, that is within six months after the end of the calendar year in the wording of the law. The authority notifies its decision and pays the refund within six months of receiving a complete claim, by bank transfer, in Luxembourg or in the State of establishment at the claimant's choice, the bank charges of a payment abroad remaining at the claimant's expense.

The Thirteenth Directive allows each Member State to make the refund conditional on reciprocity granted by the third State and to require the appointment of a tax representative. Article 55ter of the Luxembourg law, in its version coordinated at 1 January 2025, states neither a reciprocity condition nor a representative requirement for the refund. We nevertheless check the office's practice at the time of filing, because the AED's explanatory note recalls that a refund obtained improperly exposes the claimant to the tax and criminal fines of the VAT law.

The 30 June deadline is shorter than the one for EU businesses and falls in the middle of the closing season. A US, Swiss or UK business that incurred trade-fair, accommodation or service costs in Luxembourg in year N loses the corresponding VAT for good if its file, with originals and certificate, is not complete by the end of June of year N+1.

Which expenses qualify for a refund and which are excluded?

Only deductible VAT is refundable: VAT charged on goods and services used for the purposes of operations giving rise to a right of deduction, in the State of establishment as in Luxembourg. VAT invoiced in error, for instance on a service that should have been reverse-charged or on an intra-community supply that should have been exempt, cannot be refunded through this route: the only remedy is a corrective invoice from the supplier.

The invoice itself conditions the right. It must carry the particulars required by the VAT law, including the supplier's and the customer's VAT numbers for intra-community operations, the date, the taxable amount, the rate and the amount of tax. An invoice addressed to the wrong entity, to an employee in their own name or without a VAT number is the first cause of partial rejection we encounter.

For a Luxembourg company with a mixed activity, an operating holding or a real-estate company, the refundable amount depends on the deduction pro rata. A pro rata error on the credit claimed is corrected at audit, with interest. We document the method before filing, as we do for the VAT registration of holding structures.

Can your Luxembourg company recover VAT paid in another Member State?

Yes, under the same Directive 2008/9/EC applied in the other direction. A company identified for VAT in Luxembourg that paid VAT in another Member State where it is neither established nor made taxable supplies files its claim on the VAT Refund portal accessible through eTVA, with a professional LuxTrust certificate. The AED checks the identification and the right of deduction, then forwards the claim to the authority of the State of refund.

The same limits apply: filing by 30 September of the following year, a minimum of EUR 400 for a claim covering at least three months and EUR 50 for a calendar year, a decision by the State of refund within four months, extended by two months if originals are requested, payment within ten working days and late-payment interest where deadlines are missed.

The firm can file on your behalf under a mandate managed in eTVA-M: the principal creates the mandate, the agent accepts it, and only the principal's main manager and managers handle its active management. It is the same mandate that carries your periodic VAT returns when we file them, and that we describe in our eCDF guide.

What happens if the claim is filed late or incomplete?

A claim filed after 30 September, for an EU business, or after 30 June, for a non-EU business, is not examined: the corresponding VAT becomes a permanent cost. That is why we open the file in the first quarter of the following year, not in the summer.

An incomplete claim is not rejected outright, but it extends the examination. The claimant has one month to reply to a request for information, and the decision is postponed accordingly. A missing or late reply leads to a total or partial rejection, which is then challenged by an appeal within three months. The difference between a file paid in four months and a file disputed for a year most often comes down to the quality of the documents attached to the first submission.

A refund obtained on inaccurate documents exposes the claimant to the sanctions of the VAT law: breaches of filing obligations may be punished by a tax fine of EUR 250 to EUR 10,000 per breach, and the authority may demand repayment of the sums. The audit that follows is covered on our tax audit assistance page.

How much does a VAT refund claim cost?

Preparing and filing a VAT refund claim is billed from EUR 350 excl. VAT, for a Luxembourg credit as for an EU or non-EU business file. That amount covers scoping, invoice review, filing and payment follow-up. AED requests for further information and appeals against a rejection are billed on time spent, at the senior rate of EUR 150 excl. VAT per hour.

The cost is weighed against two things: the amount of VAT at stake, and the cost of a credit left dormant. A VAT credit carried forward quarter after quarter is an interest-free cash advance to the State; a repayment request filed at the right time recovers it within months. For companies with a structural credit, we build that follow-up into the accounting retainer rather than handling it case by case.

The detail of our VAT fees, returns included, is on the VAT fees page. Firm quote within 48 working hours after scoping; first reply within 24 working hours.