F.A.Q BOOKKEEPING

Bookkeeping is mandatory for companies in Luxembourg due to several key reasons, as outlined by the country's legal framework:

  1. Legal Compliance: Luxembourg's commercial law, specifically Article 12 of the Commercial Code, mandates that all companies must maintain accurate and detailed financial records. This ensures transparency and accountability in business operations.
  2. Tax Obligations: According to the General Tax Law (Loi générale des impôts), businesses are required to keep proper bookkeeping records to facilitate accurate tax reporting. This helps in preparing and filing tax returns accurately and on time, thereby avoiding penalties and fines.
  3. Financial Management: Bookkeeping provides a clear picture of a company's financial health. It allows businesses to track income, expenses, and profitability, facilitating informed decision-making and strategic planning.
  4. Audit Requirements: Under the Law of 19 December 2002 on the Trade and Companies Register and the Accounting and Annual Accounts of Undertakings, certain types of companies, particularly larger ones, are subject to regular audits. Detailed and accurate bookkeeping is crucial for auditors to verify financial statements and ensure they reflect the true financial position of the company.
  5. Investor Confidence: Maintaining thorough financial records builds trust with investors and stakeholders. It demonstrates good governance and financial stability, making the company more attractive to potential investors and partners.
  6. Risk Management: Proper bookkeeping helps in identifying financial discrepancies, fraud, or errors early. This enables businesses to address issues promptly, safeguarding their financial integrity.
In summary, bookkeeping is mandatory in Luxembourg to ensure legal compliance, accurate tax reporting, effective financial management, audit readiness, investor confidence, and robust risk management, as per the relevant articles of the Luxembourg Commercial Code and General Tax Law.


Yes, companies in Luxembourg must adhere to the Luxembourg Generally Accepted Accounting Principles (LUX GAAP). Some companies may also need to comply with International Financial Reporting Standards (IFRS) if they are part of a larger international group or listed on the stock exchange.  
According to Luxembourg law, companies must retain their financial records for a minimum of 10 years. This is stipulated in the Commercial Code and the General Tax Law to ensure records are available for legal and tax audits.
Non-compliance with bookkeeping requirements can result in significant penalties, including fines and potential legal action. The severity of the penalty depends on the extent of non-compliance and whether it leads to inaccurate tax reporting or other financial misstatements.
Bookkeeping should be performed regularly to ensure accuracy and up-to-date records.
Typically, companies in Luxembourg maintain their books on a daily, weekly, or monthly basis, depending on the volume of transactions.
Yes, many companies choose to outsource their bookkeeping to professional accounting firms.
Outsourcing can provide expertise, ensure compliance, and allow businesses to focus on core activities.
Companies in Luxembourg often use accounting software such as SAP, QuickBooks, Xero, BOB50 and ODOO.
These tools help streamline bookkeeping processes, ensure accuracy, and maintain compliance with legal requirements.
Bookkeeping provides a clear and detailed picture of a company’s financial health. It allows for accurate tracking of income and expenses, aids in budgeting and forecasting, and supports strategic decision-making.
A bookkeeper in Luxembourg is responsible for maintaining accurate financial records, managing accounts payable and receivable, reconciling bank statements, preparing financial statements, and ensuring compliance with tax and accounting regulations.
When hiring a bookkeeper or accounting firm, look for qualifications, experience with Luxembourg's accounting and tax laws, proficiency in relevant accounting software, and a track record of reliability and accuracy.