In Luxembourg VAT Law, the general rule is that suppliers are responsible for reporting and paying the output VAT for their supplies. However, in specific situations described in Article 61 of the law, the recipient of the supply is responsible for reporting and paying the VAT through the reverse charge mechanism.
This means that the recipient must calculate and declare the output and input VAT on the same VAT return and pay any net amount due. The reverse charge mechanism is applicable to certain domestic transactions as well as cross-border transactions.
Read more about Reverse Charge and “Call-off stock” in Luxembourg in our comprehensive guide below.
Consignment stock refers to goods sent by a consignor to a warehouse for sale to a final customer by a consignee. The consignor retains control of the stock, and the title passes to the consignee before the stock is sold. When foreign consignors send consignment stock to Luxembourg, they are usually required to register for Luxembourg VAT.
Such shipments are typically treated as imports if the goods are from outside the EU, or as intra-Community acquisitions if they are made within the EU from another member state.
Call-off stock refers to goods that a supplier transfers to a warehouse or storage facility where a pre-identified customer may take them at their discretion. Typically, the customer owns or controls the warehouse. If a supplier transfers call-off stock to Luxembourg from a location outside the EU, they are usually required to register either as an importer or the recipient of an intra-Community acquisition.
However, the supplier may be able to avoid registration when dealing with intra-Community transfers of call-off stock if the transaction complies with the requirements of the “EU Call-off Stock Rules.” These rules are standardized under Article 17a of the EU VAT Directive and have been incorporated into the Luxembourg VAT Law under Article 12 bis.
Last Updated: 08/12/2023
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