The glossary to understand and take action

VAT exemption scheme

A scheme subject to conditions that exempts covered transactions from charging VAT, without granting the right to deduct the corresponding VAT on purchases.

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

Understand the scope

Definition and points to distinguish

A distinction must be made between the national exemption scheme and the cross-border small enterprises scheme. Monitoring turnover and foreign transactions remains necessary. The absence of VAT on a sale does not mean that no number, return or tax is due for any other transaction. Thresholds and procedures are set out in the associated guide.

In your file

What this changes in practice

The VAT exemption scheme is subject to precise conditions, which must be checked in their version in force. It does not mean that the activity does not exist for tax purposes or that all international transactions are free from obligations. Its consequences concern, in particular, invoicing and the right to deduct. Exceeding a threshold or a change in activity must be monitored in order to adapt the scheme in time.

A scenario to help you understand

Educational example

A self-employed person benefits from an exemption scheme and starts working with foreign clients. They check the obligations specific to those transactions before invoicing.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Vérifier les conditions et seuils actuels
  • Adapter les mentions de facture
  • Suivre les changements d’activité

The practical question

Find out more

Pourquoi suivre le chiffre d’affaires même en franchise de TVA ?

L’accès et le maintien du régime dépendent de conditions qui doivent être surveillées, avec les règles et seuils en vigueur. Les opérations internationales peuvent aussi créer des obligations particulières. Une activité qui évolue ne doit pas conserver mécaniquement les mêmes mentions de facture. Organisez un contrôle régulier pour identifier à temps les démarches ou changements nécessaires.

Connecting concepts

Terms to know as well

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

VAT taxable personA VAT taxable person independently carries out an economic activity subject to VAT rules.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.Intra-Community VATThe term intra-Community VAT concerns the VAT treatment of transactions between Member States of the European Union.Registration Duties, Estates and VAT Administration (AED)The Registration Duties, Estates and VAT Administration (AED) manages, in particular, VAT and other matters falling within its remit.VAT numberThe VAT number identifies a person for their value added tax obligations within the relevant system.OSS — VAT One Stop ShopA scheme allowing VAT on certain covered transactions carried out for consumers in the European Union to be declared and paid in one Member State.

Put it into practice

Explore further with our guides

Practical guideVAT exemption scheme: check eligibility and monitor thresholdsPractical guideVAT registration: preparing for the first transactionsPractical guideOSS portal: preparing VAT for distance salesPractical guideVAT deduction: checking supporting documents and mixed use

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.