The Draft Law No. 7278 introducing the VAT group regime in Luxembourg (please refer to our newsletter dated June 2018 for more details) was adopted without any substantial changes on August 6th 2018 with retroactive effect as of July 31st 2018.
The concept of normal value (valeur normale) included in the same Draft Law thus also became applicable to all transactions within the scope of VAT that are entered into between related entities or members of the same family. The normal value concept, which is akin to the arm’s length concept in direct tax matters, will from now on serve as the taxable basis for VAT purposes in cases where such normal value is higher than the consideration agreed upon among the parties and where the beneficiary of the supply or the service recipient / service provider (as the case may be) has no (or limited) input VAT deduction right.
Share on
