Luxembourg
Temporary reduction of VAT rates
Inflation is spiralling across Europe, compelling multiple government to closely scrutinise their fiscal policies. While typically this year we have seen governments target niche VAT rates, such as energy, gas or food, some governments are making more radical changes by overhauling their standard and reduced rates. Luxembourg is one such country ”“ due to inflation standing at 6.9% in September 2022, it has been driven to review its tax measures. To this effect, Luxembourg has now announced a temporary decrease of the standard, intermediary and reduced VAT rate applied to goods and services, in line with the following:
- Standard rate: from 17% to 16%
- Intermediary rate: from 14% to 13%; and
- Reduced rate: from 8% to 7%.
- The super-reduced rate will remain unchanged at 3%.