On 18 January 2019, the Luxembourg VAT Authorities published a new circular (n°790), which provides further clarification for the determination of VAT taxable basis for intra-group transactions. The circular covers the following points:
- Transactions for which the addresses do not have a right to full deduction of the tax and whose invoiced or agreed remuneration is lower than the normal value.
- Transactions carried out in the context of an activity that is only partially deductible and whose tax base is used to establish the amount of the tax deductible.
- Transactions exempted under Article 44 and not entitled to a deduction of the tax, the invoiced or agreed remuneration of which is lower than the normal value (arm’s length price).
- Transactions giving rise to the right to deduct tax, the invoiced or agreed remuneration of which is greater than the normal value (arm’s length price).