Luxembourg has the lowest standard VAT rate in the entire European Union: 17%. And below that, three more bands: an intermediate rate of 14%, a reduced rate of 8%, and a super-reduced rate of 3%. Four rates, just like France, but starting four points lower than Spain.
| Type | Percentage | Applies to |
|---|---|---|
| Standard (taux normal) | 17 % | Default regime for goods and services |
| Intermediate (taux intermédiaire) | 14 % | Goods and services in Annex C of the 1979 VAT law |
| Reduced (taux réduit) | 8 % | Goods and services in Annex A of the 1979 VAT law |
| Super-reduced (taux super-réduit) | 3 % | Goods and services in Annex B of the 1979 VAT law |
Rates verified on 8 September 2026 against the “Taux nationaux applicables” sheet on Luxembourg’s indirect tax portal (pfi.public.lu).
The EU’s lowest rate, and why that is not an advantage for you
It is easy to read 17% as an opportunity. It is not: since the one-stop shop exists, VAT is set by the buyer’s country, not the seller’s. Selling to Luxembourg at 17% does not make you cheaper, because your local competitors apply exactly the same rate.
Where 17% does matter is the other way around: if you buy services from a Luxembourg supplier —and many digital services have their European headquarters there— the VAT shown on that invoice is theirs, not the Spanish one, and in an intra-EU business-to-business transaction it should not even appear.
A warning if you use old tables: in 2023 Luxembourg applied a temporary one-point reduction to three of its four rates. That reduction is no longer in force; the current rates are those in this table. It is an error that still circulates in outdated comparisons.
Which VAT you need to apply when selling from Spain
This is the part that does not appear in any table and is usually the real question. The rate you charge does not depend only on Luxembourg, but on how much you sell outside Spain:
- Below €10,000 per year in distance sales to the European Union as a whole —combined, not by country— you apply Spanish VAT.
- Above that €10,000 threshold, you apply the destination VAT: Luxembourg VAT, 17% or the rate that corresponds to the product, and you declare it through the one-stop shop (OSS) without needing to register there.
The threshold adds up all your B2C sales to other EU countries and digital services, and the change does not wait until the next financial year: the transaction that pushes you over the threshold already uses the destination rate.
If you sell to a company with a valid VAT ID, it is a different story: the transaction goes VAT-free under reverse charge, but you must validate that number in VIES and keep proof of the validation.
How to set this up in WooCommerce
WooCommerce includes rates by country, but it does not distinguish rates within a country by product class or monitor the threshold for you. There are three things you need to set up:
- A tax class for each rate you use, assigned product by product and not at store level.
- VAT ID validation at checkout against VIES for business customers, so VAT is not charged when the transaction is subject to reverse charge.
- A control for the €10,000 threshold, because the day it is exceeded the rates change at once across all countries.
All three are covered by EHERO Woo VAT, which we built precisely because these are the three points where stores selling to the rest of the European Union break down.
Frequently asked questions
What is the standard VAT in Luxembourg in 2026?
17%, the lowest standard rate in the European Union. Alongside it are an intermediate rate of 14%, a reduced rate of 8%, and a super-reduced rate of 3%.
Is it worth invoicing from Luxembourg to pay less VAT?
No. With the one-stop shop, in sales to final consumers the applicable VAT is that of the buyer’s country, not the seller’s. The Luxembourg rate only applies to Luxembourg buyers.
I sell from Spain to Luxembourg, which VAT do I charge?
Spanish VAT until you exceed €10,000 a year in distance sales to the EU as a whole. Above that, Luxembourg VAT, declared through the one-stop shop.
Weren’t Luxembourg’s rates 16%, 13% and 7%?
Those were the rates from the temporary 2023 reduction, which is no longer in force. Since 2024, the rates are again 17%, 14%, 8% and 3%.
Continue here
- VAT rates by EU country in 2026 — the full table for all 27
- VAT in Germany 2026 · VAT in France 2026
- The €10,000 threshold in distance sales
