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13 August 2018 / news

Luxembourg publishes Law on VAT Grouping

The Law modifies the general VAT law and now enables Luxembourg entities sharing financial, economic and organisational links to set up a VAT group.

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As foreseen in our previous newsflash, the Law on VAT Grouping has officially been published, last Friday.

The text – which provides for an entry into force on 31 July 2018 – modifies the general VAT Law. It now enables Luxembourg entities sharing financial, economic and organisational links to set up a VAT group, thus allowing them to benefit from administrative simplification, and to potentially avoid VAT leakages. Although the mechanisms and conditions are different, the VAT grouping mechanism could be used by specific groups as an alternative to the independent group of persons (also known as cost-sharing agreements).

It is therefore now possible to introduce VAT grouping declarations.

Groups having established several Luxembourg entities should actively review their VAT position and the possibility to apply the VAT grouping mechanism, potentially allowing them to save non-deductible input VAT.

Do not hesitate to contact Loyens & Loeff’s Luxembourg VAT team to further discuss your company’s position.



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