New Law Allowing The Establishment Of Tax-Free Zones Within Luxembourg
On 14 July 2011, the Luxembourg Chamber of Deputies adopted a new law which aims at completing the VAT Law of 12 February 1979. The text introduces a special regime of VAT suspension for all operations carried out in warehouses other than customs warehouses.
This faculty given in accordance with the Directive 2006/112/CE allows for the suspension, in a specific location and regarding the storage, the sale and the supply of services related to the same goods, of tax obligations in relation to VAT, excises and import duties.
The law sets up the legal framework allowing the establishment of tax-free zones within the Grand-duchy of Luxembourg. They will be locations within which activities can be performed VAT-free on goods as long as the goods don't leave the tax-free zones. As a consequence, the VAT exemption is temporary: the goods won't be taxed...
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