Luxembourg: VAT in the Digital Age (ViDA) and E-Invoicing Requirements

Transition to E-Invoicing: Key insights

In Luxembourg, e-invoicing is already a requirement for transactions with government bodies (B2G). There is no mandatory e‑invoicing for business-to-business (B2B) or business-to-consumer (B2C) transactions at this stage. Luxembourg will have to align with ViDA, and consequently, mandatory B2B e‑invoicing is clearly coming.

Given these developments, businesses need to understand what constitutes a valid e-invoice under the new rules and how the future changes may impact their operations.

It is important to recognise that an electronic invoice (e-invoice) is not the same as a digital invoice, a PDF file, or an invoice simply sent via email. The EU e-invoicing directive specifies that an e-invoice will have to be issued, transmitted, and received in a structured electronic format, which allows for automated, electronic processing.

As some other EU countries have already begun to implement ViDA into their domestic legislation, businesses are advised to consult with their local advisors to ensure compliance, as regulations may vary and change across countries.

Legal framework for E-Invoicing in Luxembourg

E-invoicing in Luxembourg is governed by Directive 2014/55/EU, which has been transposed into national legislation. At present, e-invoicing is mandatory only for B2G transactions. This means that suppliers to government bodies must issue e-invoices in a structured format that complies with the European standard EN 16931-1. Currently, there is no further specific e-invoicing legislation in Luxembourg. A draft law is currently being prepared, but it has not yet been published, and no final timeline has been communicated.

Requirements for E-Invoicing

To be considered valid, an e-invoice in Luxembourg must be created, transmitted, and received in a structured format compliant with EN 16931-1. A simple PDF attached to an email does not qualify as an e-invoice. Compliant formats in Luxembourg includes those that are UBL/XML-based or XML UN/CEFACT CII-based.

The usual platform to be used for transmission is the Peppol network that is always the preferred solution for businesses of any size when sending many invoices. Indeed, Peppol network enables to automate the process, which then leads to greater efficiency. However, in the short term, alternative solutions offered on MyGuichet.lu are more suitable for businesses and other organisations issuing few invoices per month.

Archiving and accessibility of E-Invoices

Luxembourg VAT law requires invoices to be archived in their original format for a period of ten years. Businesses must ensure the long-term readability of the original structured e‑invoices (e.g. Peppol BIS / EN 16931 XML). Storage of e-invoices outside Luxembourg is permitted, provided the invoices remain immediately accessible to the Luxembourg VAT Administration or a legal instrument is in place with the concerned State relating to mutual assistance.

During the retention period, businesses are responsible for guaranteeing the authenticity, integrity, and legibility of e-invoices.

Additional considerations

One of the main challenges is that other EU-countries have different, often more advanced, requirements that are not harmonised with those of Luxembourg. This lack of harmonisation creates uncertainty.

Direct reporting and SAF-T System

Luxembourg has already implemented since 2011 the Standard Audit File for Tax (SAF-T) system in its legislation since (the so-called FAIA File). This FAIA file consists of exporting the accountancy data under a electronic file (XML) in accordance with the specifications requested by the Luxembourg VAT Authorities in order to allow them the verification of the VAT returns submitted. This file is produced only upon request by the Luxembourg VAT Administration, typically in the context of a VAT audit and does not apply to all businesses. Even though Luxembourg is well advanced in this area, it is not strictly speaking real-time reporting as ViDA tends to be in relation to mandatory e-invoicing.