Luxembourg is preparing for inflation. In order to create relief, Luxembourg is therefore reducing almost all sales tax rates. The reduction is initially limited and should apply from January 1st, 2023 to December 31st, 2023.
From January 1st, 2023, the tax rate of 17% will no longer apply, but 16% (standard sales tax rate). This also applies to the intermediate and reduced tax rates, which are each reduced by 1%. However, there is no change in the greatly reduced tax rate, which remains in place.
What exactly does the change in tax rates mean for me as an online retailer?
It must now be ensured that the tax rates must be shown correctly on the invoices from January 1st, 2023.
There is expressly no obligation to pass this reduction on to customers. So anyone who has agreed gross prices (which is common in online trading) increases their margin for customers from Luxembourg for the year 2023.
According to our current status, it is still unclear how exactly the reports due to the tax cuts in Luxembourg are to be made using the OneStopShop procedure. As soon as we have more information on this, we will post this in a separate blog post.
From January 1st, 2023, the tax rate of 17% will no longer apply, but 16% (standard sales tax rate).