The glossary to understand and take action

VAT reverse charge

VAT reverse charge refers to a mechanism under which the customer is liable for the tax according to the conditions applicable to the transaction.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

The absence of VAT charged by the supplier does not mean that there is no tax or no return to file. Check the place of supply, the status of the parties, the required statements and the right to deduct.

In your file

What this changes in practice

The reverse charge refers to a mechanism under which the recipient accounts for the tax according to the conditions of the transaction. It does not mean that the transaction is outside the scope of VAT. The place of taxation, the person liable for the tax, the invoice statements and the return boxes must be determined. The right to deduct must be assessed separately: reverse-charged tax is not necessarily fully recoverable if the activity does not give rise to a full right of deduction.

A scenario to help you understand

Educational example

A company receives a foreign service falling within a reverse-charge mechanism. It calculates the tax to be reported and considers any deductible portion, rather than classifying the invoice as having no VAT impact.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Qualifier l’opération et le lieu d’imposition
  • Vérifier la déclaration de taxe due
  • Examiner distinctement le droit à déduction

The practical question

Find out more

L’autoliquidation signifie-t-elle que l’opération est sans TVA ?

Non. Elle transfère, dans les cas prévus, le mécanisme de déclaration de la taxe au destinataire plutôt que sa collecte par le fournisseur. L’opération reste à qualifier et à déclarer correctement. Le droit à déduction éventuel s’examine séparément. Une facture sans taxe affichée peut donc créer des obligations pour le client dans sa propre déclaration.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

Intra-Community VATThe term intra-Community VAT concerns the VAT treatment of transactions between Member States of the European Union.Right to deduct VATThe right to deduct allows, subject to conditions, the deduction of input VAT incurred in connection with transactions giving rise to that right.VAT returnThe VAT return reports transactions and tax amounts to the AED according to the regime assigned to the taxable person.VAT taxable personA VAT taxable person independently carries out an economic activity subject to VAT rules.VATValue added tax (VAT) is a consumption tax applied to transactions falling within its scope according to their own rules.VAT numberThe VAT number identifies a person for their value added tax obligations within the relevant system.

Put it into practice

Explore further with our guides

Practical guideVAT returns in Luxembourg: frequency, preparation and checksPractical guideVAT in Luxembourg: rates and checks before invoicingPractical guideInvoicing in Luxembourg: the details to checkPractical guideCross-border B2B services: place of supply and reverse charge

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.