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Luxembourg Tax News 2014-18

Luxembourg Tax News 2014-18



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Proposed changes to the Luxembourg VAT law

VAT Free Zone, margin scheme and import of collectors' items and antiques

A bill of law (n°6713, hereafter “the Bill”), amending the Law of 12 February 1979 on value added tax and the Law of 17 December 2010 on excise duties, has been submitted to the Luxembourg Parliament in early September.

From a VAT perspective, the Bill aims at transposing in Luxembourg several optional provisions of the EU VAT Directive related to VAT free zones. In particular, the Bill aims at avoiding double taxation in situations where the goods leave the VAT suspension regime (regularization of VAT and import of goods subject to VAT) by exempting the import of goods in this particular case.

The Bill will also extend the margin scheme to organizers of sales by public auctions. The margin scheme should be comparable to the one currently applicable to the supply of second hand goods, works of art, collectors’ items and antiques.

Furthermore, under the Bill, the reduced VAT rate (currently 6%) shall apply also to imports of collectors’ items and antiques (currently applicable to imports of works of art but not collector’s items and antiques).It is expected that the new law enters into force on 1 January 2015.

From a practical perspective, the new provisions should positively influence the transactions related to the recently implemented Luxembourg VAT Free Zone and support its future development.


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