The 'provision of services' refers to all transactions that do not constitute a delivery of goods, an intra-Community acquisition or the import of a good.

It therefore includes the sale of a service or the rental of a tangible good but not the sale of a tangible good.

The VAT applicable to the provision of services depends on the type of customer and the type of service.

VAT is, in principle, payable:

• in the customer's country of establishment in the case of the provision of services between taxable persons ('B2B');
• in the service provider's country of establishment in the case of the provision of services to end consumers ('B2C').

Some services are an exception to this rule, for both taxable and non-taxable persons.

Who is concerned?

The obligations regarding the application of VAT with respect to the provision of services must be respected by any business subject to VAT which:

• provides taxable services in another EU country;
• or receives services provided by foreign businesses.

What are the prerequisites?

Businesses liable for VAT in Luxembourg must:

• register for VAT with the Luxembourg Land Registration and Estates Department (Administration de l'enregistrement et des domaines - AED)
• declare VAT to the Luxembourg Land Registration and Estates Department;
• submit recapitulative statements concerning service provisions (in the event of intra-Community provision of services).

How to proceed

Principle

B2B – VAT of the customer's country of establishment

Services provided between taxable persons ('B2B') are in principle subject to VAT in the customer's country of establishment.

VAT is therefore payable in the country in which the taxable customer has its place of business or, failing this, the country in which it has a permanent establishment to which the services in question are provided.

Registered office: place where the business has its central administration and where essential decisions concerning general business management are made, where the registered office is located as defined in the articles of association and where the management holds its meetings.
A postal address cannot be the location where the taxable person has established the registered office of his business.

Permanent establishment for VAT : business establishment other than the registered office and which is defined by having sufficient business activity and an appropriate infrastructure in terms of human and technical resources allowing for services to be purchased and used for the requirements of said establishment.
The permanent establishment must also have sufficient resources to carry out the business activity itself, i.e. in this case the provision of services.

B2C – VAT of the service provider's country of establishment

For the provision of services to non-taxable persons ('B2C'), the main rule concerning location remains that VAT is payable in the country of the service provider.