VAT in Luxembourg: what costs what

Every price you see in a Luxembourg shop already includes VAT (TVA in French). You never add it at the till. But the rate isn’t the same for everything, and once you know the pattern a few prices make more sense: why a bottle of Moselle Rivaner and a bottle of crémant are taxed differently, or why your plumber may be able to charge you 3% instead of 17%.

There are four rates, and the standard one is lower than in Germany, France or Belgium (see the comparison further down).

The four rates

Rate	Name	What it covers, in short
17%	Standard (taux normal)	Everything that isn’t on one of the three lists below
14%	Intermediate (taux intermédiaire)	Still wine up to 13% alcohol, heating oil and other heating fuels, washing powder and cleaning products, advertising print, safekeeping of securities
8%	Reduced (taux réduit)	Electricity, gas, district heating, firewood, plants and flowers, hairdressing, some repairs, cleaning of private homes, bicycles and e-bikes
3%	Super-reduced (taux super-réduit)	Food (not alcohol), restaurant meals, children’s clothes and shoes, books and newspapers, medicines, water, public transport and taxis, hotels, concerts, cinemas, museums, sports facilities, solar panels on homes, and approved home building and renovation work

Source: the VAT law, Art. 39 and 40 and Annexes A, B and C, and the AED’s rate page. The way the law works is simple: three lists (Annex A for 8%, Annex B for 3%, Annex C for 14%), and anything not on a list is 17%.

Did anything change in 2025 or 2026? No change to the rates. The 2026 budget law simply carries the existing taxes over. The last changes most people would notice came on 1 January 2023: solar panels on homes dropped to 3%, and bicycles (including e-bikes), bike hire and household-appliance repairs to 8% (AED circular 816). For 2023 only, the 17%, 14% and 8% rates were cut by one point to 16%, 13% and 7%. They went back up on 1 January 2024 (AED circular 812-1). A bill about VAT and online platforms (no. 8812) was filed in July 2026. It isn’t law yet.

What costs what: the everyday list

The last column shows how firm each answer is. High means the item is named in the law or on an official page. Medium means it follows from the law’s wording but no official page names it. Not confirmed means no official answer was found.

Food, drink and the weekly shop

What you buy	VAT	Confidence
Food (groceries, bread, meat, fruit, baby food)	3%	High
Soft drinks, juice, bottled water	3%	Medium: food is 3% “excluding alcoholic drinks”, so non-alcoholic drinks should be 3%
Still wine up to 13% alcohol	14%	High
Wine over 13%, sparkling wine and crémant, fortified wine, beer, spirits	17%	High (not on the 14% list, which excludes sparkling and fortified wine)
Restaurant and café meals, takeaway food	3%	High
Alcoholic drinks in a restaurant or bar	17%	High (excluded from the 3% restaurant rate; Le Quotidien, 2025)
Washing powder, dishwasher tablets, cleaning products	14%	High
Toiletries, cosmetics, shampoo	17%	Medium (on no reduced list)
Sanitary pads and tampons, contraceptives	3%	High
Tobacco	17%	Medium (on no reduced list)
Plants and cut flowers	8%	High
Pet food	3%	High (“food for animals”)

Children

What you buy	VAT	Confidence
Clothes, shoes, hats, scarves and gloves for children under 14	3%	High
A child’s haircut	8%	High (hairdressing is 8% for everyone)
Toys	17%	Medium (on no reduced list)
Books for children	3%	High

A small trap: some English summaries online say children’s “hairstyles” are 3%. The French word in the law, coiffures, here means headwear, i.e. hats. Haircuts are in the 8% list as coiffage.

Clothes, repairs and services at home

What you buy	VAT	Confidence
Adult clothes and shoes	17%	Medium (on no reduced list)
Hairdresser (men and women)	8%	High
Repairs to shoes, leather goods, clothes and household linen, including alterations	8%	High
Repairs to household appliances	8%	High
Window cleaning and cleaning of private homes	8%	High
Bicycles and e-bikes, bike hire and bike repairs	8%	High
Car repairs, beauty treatments, phone and internet	17%	Not confirmed (on no reduced list)
Funeral and cremation services	3%	High

Energy, water and the home

What you buy	VAT	Confidence
Electricity	8%	High
Gas (mains or bottled)	8%	High
District heating	8%	High
Firewood	8%	High
Heating oil (mazout) and coal	14%	High (petrol.lu table and the law)
Tap water	3%	High
Wastewater, emptying septic tanks	3%	High
Rubbish collection	3%	High
Solar panels supplied and fitted on a home	3%	High (since 1 Jan 2023, billed straight at 3%, no application needed)
Rent on a flat or house	Exempt	High (renting property is exempt; parking spaces, safes and holiday lets are not)
Building or renovating your main home	17%, or 3% under the housing scheme	High (see below)

Getting around

What you buy	VAT	Confidence
Bus, tram and train tickets (first class, cross-border)	3%	High (passenger transport). Second class inside Luxembourg is free anyway; see “Getting around Luxembourg”.
Taxis and ride apps	3%	High (passenger transport)
Petrol and diesel	17%	High (petrol.lu table, 2nd half of 2026)
Cars, new or used from a dealer	17%	Medium (on no reduced list)
Renting a parking space	17%	High (excluded from the rent exemption)

Health

What you buy	VAT	Confidence
Medicines (prescription or not), vet medicines	3%	High
Therapeutic items and medical devices for people with disabilities	3%	High
Doctors, dentists	Exempt	High
Lab tests	Exempt	High
Physiotherapy and other paramedical care, on prescription or paid by the CNS	Exempt	High (sauna and beauty care are not exempt)
Hospital care	Exempt	High
Vet fees	17%	Not confirmed

Books, culture, sport and going out

What you buy	VAT	Confidence
Books, newspapers and magazines, printed or digital (e-books, online subscriptions)	3%	High (not mostly-advertising, video, music or adult publications)
Library lending	3%	High
Audiobooks	Not confirmed	No official answer found
Concerts, theatre, cinema, shows, museums, zoos, nature parks, circuses	3%	High
Entry to talks, courses and conferences	3%	High
Entry to or use of sports facilities (pool, climbing wall, ice rink)	3%	High
Radio and TV reception (except adult content)	3%	High
Streaming (Netflix, Spotify and similar)	Not confirmed	No official answer found
Other digital services and apps	17%	Medium (on no reduced list)
Hotels, B&Bs, holiday lets, campsites	3%	High
Works of art and antiques (in most sales)	8%	High (not when sold by a dealer under the margin scheme)

Money, school and post

What you buy	VAT	Confidence
Bank accounts, payments, loans, insurance	Exempt	High
Safekeeping and management of securities	14%	High
Schools, universities and approved vocational training	Exempt	High
Private lessons given by a teacher in their own name (school or university subjects)	Exempt	High
Postal services from the public postal operator, stamps at face value	Exempt	High
Authorised betting, and authorised lotteries whose proceeds go to good causes	Exempt	High

Exempt is not the same as 0%

You’ll see “exempt” a lot in the tables. It means no VAT is added to your bill: rent, doctors, banks, schools, insurance and the post. The business usually can’t reclaim the VAT it paid on its own costs, though, so some of that ends up in the price.

Luxembourg doesn’t have a 0% rate for anything you buy in a shop here. The lowest rate is 3%. (Belgium, for example, has a 0% rate for a few items, according to SPF Finances.) Exports leaving the EU are free of Luxembourg VAT, but that’s for businesses and for visitors from outside the EU, not for residents.

Building or renovating a home: the 3% scheme

Normally building work is 17%. If the home is, or will be, someone’s main home, approved work can be taxed at 3% instead (Guichet.lu, Ministry of Housing).

• New build: only for a home the owner lives in as their main home.
• Renovation: also for a home rented out to someone who lives there as their main home. It covers substantial improvement work done within five years of buying, or on a home at least 10 years old, carried out within two years of starting.
• The cap: the tax saving is at most €50,000 per home, over its whole life, not per owner.
• How you get it: either the tradesperson applies to the AED before work starts (you countersign the form) and bills you 3% directly, or you pay 17% and claim the difference back from the AED. You have five years from 31 December of the year concerned to claim.
• What’s covered: structural work, roof, façade, windows and doors, plumbing and bathroom fittings (not furniture or mirrors), heating, electrics, floor and wall coverings, painting and wallpaper.
• What isn’t: fitted kitchens and furniture, alarms and home automation, air conditioning and “wellness”, blinds and curtains, gardens (except the drive), notary, architect and engineer fees.
• Keep it as your main home: if the home is used for something else within two years, the saving has to be paid back with interest (AED).

Solar panels on a home are separate: they’re billed at 3% straight away, with no application.

How Luxembourg compares with its neighbours

Country	Standard rate	Source
Luxembourg	17%	VAT law, Art. 39
Germany	19% (reduced 7%)	§ 12 UStG
France	20%	impots.gouv.fr
Belgium	21% (also 12%, 6% and 0%)	SPF Finances

A lower VAT rate doesn’t make everything cheaper here. Shop prices depend on much more than tax, which is why some things, like drugstore products, are still cheaper over the border. The “Shopping across the border” guide has the official price comparison.

When you shop in person in another EU country, you pay that country’s VAT and simply bring your things home for your own use (Your Europe).

Buying online

From a shop in another EU country. Most online shops have to charge you Luxembourg VAT, not the VAT of the country they ship from. The rule applies once a seller’s cross-border sales to other EU countries go over €10,000 a year, so it covers nearly every big retailer. The seller declares it through the EU’s one-stop shop (OSS) and you don’t have to do anything. That’s why the price can change when you type in a Luxembourg delivery address (Your Europe).

Digital things (e-books, apps, downloads, streaming) are taxed where you live, so you pay Luxembourg VAT, whether the seller is in the EU or not (Your Europe).

A new car bought in another EU country pays VAT where you register it, so in Luxembourg (Your Europe).

From outside the EU (for example China, the UK, the US or Switzerland), according to Luxembourg Customs:

• VAT is due from the first cent. The old small-parcel exemption ended on 1 July 2021.
• Parcels up to €150: if the seller is registered for the EU’s import one-stop shop (IOSS), you pay the VAT when you order. If not, you pay it on delivery, to the post or courier.
• Since 1 July 2026 there is also a flat €3 customs duty per type of item in parcels up to €150. Five T-shirts count as one type (€3), and a T-shirt and a pair of jeans as two (€6) (Customs news, June 2026, European Commission). It runs until 1 July 2028. The Commission says the seller or importer is responsible for it, but in practice it may be passed on in the price.
• Parcels over €150: you pay VAT, normal customs duty and any excise when the parcel arrives.
• Handling fees: the post or courier may charge its own fee for doing the customs paperwork. That fee is theirs, not the customs office’s.
• Gifts from family or friends outside the EU are free of duty and VAT up to €45 per parcel, as long as nothing was paid. Above €45, VAT is due on the whole value.

Where to check

• AED VAT rates page and the full VAT law with the three lists (French; the lists are on pages 123 to 126).
• Guichet.lu on the 3% housing rate.
• Luxembourg Customs on parcels.

This page explains the general rules. It isn’t tax advice, and for a specific product the AED has the final word.