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Reduced VAT in Luxembourg: what you have to know


Janvier 11, 2023 - 10am

Every January brings its share of changes. In 2023, VAT evolves. Indeed, some decisions have been taken to reduce the value added tax in order to counter inflation in Luxembourg.

Supporting Luxembourg households

VAT in Luxembourg

While income tax is the main source of tax revenue for the country (4.5 billion euros), VAT also represents a significant part of this revenue. With 3.7 billion euros recovered each year, it is in second place and brings in the equivalent of annual public investment.

VAT is therefore an important source of income for the Luxembourg State. With its 17% rate on a majority of products, its regulation has significant consequences on the life of households.

To struggle against the effects of the inflation as well as the explosion of housing prices, measures have been taken for the coming year. The aim? To ensure a better purshasing power to consumers.

The announced measures

1% off: this is the VAT reduction for this year 2023 in Luxembourg. The rate is reduced from 17% to 16%. This decision was taken last autumn during the “tripartite”.

The goal? To compensate for the increasing inflation and thus to support the purchasing power of Luxembourgish people. Energy prices and consumer prices in general have risen sharply in recent months, directly impacting Luxembourg households.

The 17% VAT is not the only one to change. Indeed the different rates will all be reduced by 1% as of 1 January:

  • The 17% VAT rate will be reduced to 16%;

  • The 14% VAT rate will be reduced to 13%;

  • The 8% VAT rate will be reduced to 7%.

Only the super-reduced VAT rate of 3% remains unchanged. It concerns food, entertainment tickets and pharmaceutical products for instance.

These new rates are effective for the period from 1 January to 31 December 2023.

What is changing at Orange Luxembourg?

Although our displayed prices do not change, this measure will appear on all your invoices in 2023. This means that the price of your mobile and fiber subscriptions is reduced, starting with your first invoice of the year which you will receive in mid-February.

Do you have a 100% Win mobile plan? You will be charged €14.86 each month instead of €14.99 as displayed in our shops and on our website. Do you have a 500mbit/s fiber subscription? You will be charged €48.58 instead of €49.

There are no price changes for our TV services. They are subject to the 3% reduced VAT rate which doesn’t change.

For more information, do not hesitate to check out all our updated rates and the detail of our offers, and to ask our advisors in all our shops.