Luxembourg raises its VAT franchise threshold from EUR 35,000 to EUR 50,000 and opens it to EU businesses from 2025
This page records one dated change. For the rules in Luxembourg as they stand today, see the Luxembourg guide →
- Jurisdiction
- Luxembourg
- Tax
- VAT (TVA)
- Change type
- Threshold
- Status
- In force
- Impact
- FYI
- Announced
- 20 December 2024
- Effective
- 1 January 2025
- Instrument
- LU-LAW-M-morial-A-N-574-20-12-2024
- Authority
- Journal officiel du Grand-Duché de Luxembourg (Legilux)
- Verified
- Fetched from official source · high confidence
Businesses established in Luxembourg with annual Luxembourg turnover up to EUR 50,000; EU businesses with Luxembourg turnover up to EUR 50,000 and EU-wide turnover up to EUR 100,000.
No action required — monitoring only. Luxembourg domestic TVA franchise threshold is EUR 50,000 since 1 January 2025. EU businesses may also benefit from the cross-border small-business exemption.
The law of 20 December 2024 (Mémorial A No. 574, published 23 December 2024) replaced the small-business section of the TVA law of 12 February 1979 (Articles 57 to 57quater), raising the domestic franchise threshold from EUR 35,000 to EUR 50,000 of annual Luxembourg turnover from 1 January 2025. A 10% tolerance applies: a business that exceeds EUR 50,000 by no more than 10% (up to EUR 55,000) keeps the franchise for the rest of that year; above that, the franchise ends from the day after the threshold is exceeded. Article 57ter transposes Council Directive 2020/285/EU: businesses established in another EU Member State may apply the Luxembourg exemption without Luxembourg VAT registration if their Luxembourg turnover is within EUR 50,000, their EU-wide turnover within EUR 100,000 and they hold an EX-suffixed number in their home state.
What changed in detail
The law of 20 December 2024, published in Mémorial A No. 574 on 23 December 2024, replaces the small-business section of the TVA law of 12 February 1979 (Articles 57 to 57quater). It transposes Council Directive (EU) 2020/285 and enters into force on 1 January 2025.
Domestic franchise (Article 57bis). Supplies made in Luxembourg by a taxable person established there are exempt if its annual Luxembourg turnover does not exceed EUR 50,000. The previous threshold was EUR 35,000. A business under the franchise cannot deduct input VAT or show VAT on its invoices, which must carry the mention « TVA non applicable – Article 57bis de la loi modifiée du 12 février 1979 ».
Tolerance. If the threshold is exceeded during a year by no more than 10% (up to EUR 55,000), the franchise continues for the rest of that year. Above 10%, it ends from the day after the threshold is exceeded. A business that exceeded the threshold in the previous year cannot use the franchise for one calendar year.
Cross-border scheme (Article 57ter). A business established in another EU Member State may apply the Luxembourg exemption without registering for Luxembourg VAT if its Luxembourg turnover is within EUR 50,000 and its EU-wide turnover within EUR 100,000, and it holds an EX-suffixed identification number from its home state.
What it means
The EUR 50,000 threshold has applied since 1 January 2025 and is still in force in November 2026; the weekly feed holds no later change to it.
For Luxembourg micro-businesses the higher threshold took many out of VAT, but the franchise is not automatic for those already in the normal regime: Article 57bis(7) lets them ask to be moved into it. The 10% tolerance changes the exit point, so a business crossing EUR 55,000 mid-year must start charging VAT from the next day, not from the following year. For EU businesses, Luxembourg is now reachable without local registration through the home-state EX-number process.
Proof
dont le chiffre d’affaires annuel au Grand-Duché de Luxembourg n’excède pas le seuil de 50 000 euros.whose annual turnover in the Grand Duchy of Luxembourg does not exceed the threshold of EUR 50,000.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Mémorial A N° 574 du 23 décembre 2024: Loi du 20 décembre 2024 modifiant la loi modifiée du 12 février 1979 concernant la TVA (ELI eli/etat/leg/loi/2024/12/20/a574/jo) · data.legilux.public.lu