|
|
|
Decrease of 1% of the VAT rates for the year 2023
Decided by the Tripartite and concretised by the law of 26 October 2022 (memorial A n°534), the VAT decrease will concern the rates of 17%, 14% and 8% (going respectively to 16%, 13% and 7%).
The super-reduced VAT rate will remain unchanged at 3%.
This 1% reduction will apply to all products and services, without restriction as to activity, between 1st of January 2023 and 31st December 2023.
What about operations carried out in 2022 but invoiced in 2023?
- In theory
For example, an order is placed in 2022 but delivered / paid for in 2023.
To determine the applicable VAT rate (17% or 16%), the VAT law refers to the chargeable event, i.e., when the delivery of goods is made / when the provision of services is completed. This is therefore the moment when the operation is carried out.
However, there are some exceptions to this rule:
In the case of a deposit/advance invoice, the VAT payable will be that at the rate in force at the time of collection, up to the amount received.
For simplification, if there is an obligation to issue an invoice (the most frequent situation), the VAT rate will be determined by the date of the invoice.
To determine the applicable VAT rate (17% or 16%), the VAT law refers to the chargeable event, i.e., when the delivery of goods is made / when the provision of services is completed. This is therefore the moment when the operation is carried out.
However, there are some exceptions to this rule:
In the case of a deposit/advance invoice, the VAT payable will be that at the rate in force at the time of collection, up to the amount received. For simplification, if there is an obligation to issue an invoice (the most frequent situation), the VAT rate will be determined by the date of the invoice.Point of attention: the invoice must be issued no later than the fifteenth day of the month following that during which the delivery of goods or supply of services was made. If the invoice is issued after this period, the key date for the application of the VAT rate will remain the 15th day of the month following the completion of the transaction.
There is no point in invoicing in 2023 a service which, according to the VAT rules, should have been invoiced in 2022, with the idea of benefitting from the reduced rate.
- In practice / examples
1) A customer orders a new car from the garage. deposit invoice is issued in October 2022 at the rate of 17%. The car is delivered in December 2022. The invoice for the outstanding balance must be issued no later than 15 January 2023 (15th day of the month following the chargeable event / delivery).
If the invoice is issued in December 2022, a VAT rate of 17% applies (rate from the date of the invoice).
If the invoice is issued in January 2023, a VAT rate of 16% applies (rate from the date of the invoice).
If the invoice is issued late, after 15 January 2023, in February for example, the applicable VAT rate is that in force on 15 January 2023 (invoicing deadline), i.e., 16%.
Thus, all goods delivered, and services supplied in December 2022 will benefit from the VAT rate of 16% in the event of invoicing in 2023. But if the invoice is issued in December 2022, the VAT rate of 17% will apply.
If the invoice is issued in December 2022, a VAT rate of 17% applies (rate from the date of the invoice).
If the invoice is issued in January 2023, a VAT rate of 16% applies (rate from the date of the invoice).
If the invoice is issued late, after 15 January 2023, in February for example, the applicable VAT rate is that in force on 15 January 2023 (invoicing deadline), i.e., 16%.
Thus, all goods delivered, and services supplied in December 2022 will benefit from the VAT rate of 16% in the event of invoicing in 2023. But if the invoice is issued in December 2022, the VAT rate of 17% will apply.
2) Painting work is carried out in October 2022, but invoiced (with delay) in January 2023. The invoice should have been issued no later than 15 November 2022. The applicable VAT rate will be that of the billing deadline, namely that of 15 November 2022: 17%.
The invoice issued in January 2023 must include a VAT rate of 17%!
The applicable rate is not based on the date of the invoice issued (2023) but on the billing deadline (15th day of the month following the operation / 2022).
The 17% rate must be maintained in accounting billing software in 2023.
The invoice issued in January 2023 must include a VAT rate of 17%!
The applicable rate is not based on the date of the invoice issued (2023) but on the billing deadline (15th day of the month following the operation / 2022).
The 17% rate must be maintained in accounting billing software in 2023.
3) An accounting service is carried out in November 2022 and invoiced in December 2022 at 17%. A credit note is issued for this service in 2023.
The credit note must include the same VAT rate as the initial invoice. The credit note issued in 2023 for an initial invoice of 2022 must include 17% VAT.
What if a new invoice, corrected, is issued after the credit note for this same accounting service, in 2023? The VAT rate is linked to the deadline for billing the service. The invoicing deadline for a service carried out in November 2022 is 15 December 2022.
The new invoice, dated 2023, must include VAT at 17% (rate in force on 15 December 2022).
The credit note must include the same VAT rate as the initial invoice. The credit note issued in 2023 for an initial invoice of 2022 must include 17% VAT.
What if a new invoice, corrected, is issued after the credit note for this same accounting service, in 2023? The VAT rate is linked to the deadline for billing the service. The invoicing deadline for a service carried out in November 2022 is 15 December 2022.
The new invoice, dated 2023, must include VAT at 17% (rate in force on 15 December 2022).
4) Rents are collected with VAT by the lessor. There are no rental invoices (the rental agreement is sufficient). We come back to the rule of the chargeable event.
The rent for December 2022 will include VAT at 17%, that for January 2023 will include VAT at 16%.
The rent for December 2022 will include VAT at 17%, that for January 2023 will include VAT at 16%.
N.B. The same rules are applicable to invoices received from a foreign service provider with Luxembourg VAT applied under reverse charge mechanism. Examples:
From a Luxembourg point of view, the foreign service provider / supplier must invoice the 15th day of the month following the service. The Luxembourg customer must self-assess VAT under reverse-charge mechanism on this date.
From a Luxembourg point of view, the foreign service provider / supplier must invoice the 15th day of the month following the service. The Luxembourg customer must self-assess VAT under reverse-charge mechanism on this date.
- In practice / examples
1) A Luxembourg taxable company buys a machine from a Belgian company. The machine is delivered in December 2022. The invoice must be issued (from a Luxembourg VAT rules point of view) no later than 15 January 2023 (15th day of the month following the chargeable event / delivery).
If the invoice is issued in December 2022, VAT is self-assessed at the rate of 17% under reverse-charge mechanism (rate of the date of the invoice).
If the invoice is issued in January 2023, VAT is self-assessed at the rate of 16% under reverse-charge mechanism (rate of the date of the invoice).
If the invoice is issued late (according to Luxembourg VAT rules, but potentially on time according to foreign rules), after 15 January 2023, in February 2023 for example, VAT is self-assessed at the rate of 16% under reverse-charge mechanism (Luxembourg rate applicable on the billing deadline / on 15 January 2023).
As a consequence, all goods delivered, and services supplied in December 2022, invoiced in 2023, may be subject to 16% VAT rate under reverse-charge mechanism. But if the invoice is issued in December 2022, the 17% rate would apply.
If the invoice is issued in December 2022, VAT is self-assessed at the rate of 17% under reverse-charge mechanism (rate of the date of the invoice).
If the invoice is issued in January 2023, VAT is self-assessed at the rate of 16% under reverse-charge mechanism (rate of the date of the invoice).
If the invoice is issued late (according to Luxembourg VAT rules, but potentially on time according to foreign rules), after 15 January 2023, in February 2023 for example, VAT is self-assessed at the rate of 16% under reverse-charge mechanism (Luxembourg rate applicable on the billing deadline / on 15 January 2023).
As a consequence, all goods delivered, and services supplied in December 2022, invoiced in 2023, may be subject to 16% VAT rate under reverse-charge mechanism. But if the invoice is issued in December 2022, the 17% rate would apply.
2) An accounting service is performed in November 2022 and self-assessed under reverse charge mechanism in December 2022 at 17%. A credit note is issued for this service in 2023.
The credit note must be self-assessed based on the same VAT rate as the initial invoice. The credit note issued in 2023 for an initial invoice of 2022 will have to be self-assessed under reverse charge mechanism with 17% VAT.
What if a new invoice, corrected, is issued after the credit note for this same accounting service, in 2023? The VAT rate is linked to the billing deadline. The billing deadline for a service in November 2022 is 15 December 2022. The new bill, dated 2023, must be self-assessed under reverse-charge at 17% (rate in force on 15 December 2022).
The credit note must be self-assessed based on the same VAT rate as the initial invoice. The credit note issued in 2023 for an initial invoice of 2022 will have to be self-assessed under reverse charge mechanism with 17% VAT.
What if a new invoice, corrected, is issued after the credit note for this same accounting service, in 2023? The VAT rate is linked to the billing deadline. The billing deadline for a service in November 2022 is 15 December 2022. The new bill, dated 2023, must be self-assessed under reverse-charge at 17% (rate in force on 15 December 2022).
|
|
