Switch from 17% standard rate to 8% reduced rate from January 2025
Luxembourg is to join many EU states by providing works of art with the reduced VAT rate tax break. This follows the German art VAT cut to 7% in January 2025.
Luxembourg’s government council has approved a bill to reduce the VAT rate on works of art from 17% to 8%, benefiting the art sector. This decision, made on June 26, followed efforts by the Luxembourg Association for Art Galleries & Practitioners (Lafa) and VAT Solutions, who emphasized the reform’s importance to the Ministry of Culture and the Ministry of Finance.
The initiative aligns with EU Directive 2022/542, aimed at standardizing VAT rates across member states, but avoids the negative impact of increasing VAT on art imports and sales. The reduced rate will make art more affordable, potentially boosting local gallery sales and tax revenues.
Luxembourg’s new VAT rate will align more closely with neighbouring countries:
- France (5.5%);
- Belgium (6%); and
- Germany (7%).
The legislative process will now proceed, with the 8% rate expected to take effect from January 1, 2025.
