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Reverse Charge & “Call Off Stock” in Luxembourg

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.

Luxembourg VAT guide

Reverse Charge in Luxembourg

Cross-Border Reverse Charge

Under the reverse charge mechanism, the following cross-border transactions are subject to the reverse charge:

  • When a taxable person established in Luxembourg receives services with a place of supply in Luxembourg, from suppliers established outside Luxembourg; and
  • Intra-Community acquisitions.
Domestic Reverse Charge

Regardless of the supplier’s location, the reverse charge mechanism applies to the following supplies:

  • Certified greenhouse gas emission allowances transfer
  • Supply of gas and electricity certificates
  • Delivery of gas, electricity, heating, or cooling energy through an EU-based network to a taxable dealer by a taxable person who is not established in Luxembourg, provided that the place of supply is in Luxembourg.

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Luxembourg – Call off stock

Consignment stock 

 

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

 

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

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

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