Regulatory updates - Luxembourg

On July 17, 2026, Luxembourg Government Council has approved a draft law extending mandatory electronic invoicing to domestic B2B transactions between businesses established in Luxembourg.

Subject to parliamentary approval, the phased implementation timetable is as follows:

• January 1, 2028: Mandatory receipt of electronic invoices for all businesses
• July 1, 2028: Mandatory issuance of electronic invoices for large and medium sized businesses
• January 1, 2029: Extension of the mandatory issuance requirement to all other businesses, including smaller enterprises

The Government Council also endorsed a draft regulation establishing the technical framework for a common delivery network and alternative transmission methods. The proposed framework adopts a four-corner model based on the Peppol network, building on Luxembourg's existing public sector infrastructure.

To support businesses through the transition, the Chamber of Commerce plans to run information sessions and practical workshops, and to update its practical guide to electronic invoicing. Financial assistance will also be made available to help businesses acquire compliant software.

The draft law now moves into Luxembourg's parliamentary process, where details such as dates, scope, and technical standards will be finalized before it enters into force.

The 2024 rates will be the following:

• Standard VAT rate: 17% (up from 16%);
• Intermediate reduced VAT rate: 14% (up from 13%) on certain goods and financial services;
• Reduced VAT rate: 8% (up from 7%) on certain goods and services such as gas & electricity;
• Super reduced VAT rate: 3% (no change).

The amended VAT rates, which entails a 1% drop in all categories, will apply from January 2023. The changes include:

• 16% (previously 17%) will apply to the sales of all goods and services that do not fit the criteria to adhere to any lower VAT rate.
• 13% (previously 14%) will apply to specific goods and services, such as:
• Certain financial services, namely in the management of securities;
• Various materials to be consumed as fuel, including solid combustibles and wood;
• Cleaning preparations, including detergent and more.
• 7% (previously 8%) will apply to specific goods and services, such as:
• Electricity
• Gas
• Heat from heating systems
• Bicycle repair and more.

The 3% reduced rate in Luxembourg will remain unchanged.