Luxembourg has proposed legislation to extend mandatory electronic invoicing to domestic business-to-business transactions from 2028, aligning its VAT framework with the European Union's VAT in the Digital Age (ViDA) reforms and preparing businesses for EU-wide digital reporting requirements from 2030.
Luxembourg has published a draft bill to expand mandatory electronic invoicing from business-to-government (B2G) contracts to domestic business-to-business (B2B) transactions, introducing a phased implementation from 2028. The proposal would amend the Law of 16 May 2019 on electronic invoicing and the modified Law of 12 February 1979 on Value Added Tax (VAT) to align national legislation with the European Union’s VAT in the Digital Age (ViDA) reforms.
The legislation transposes Article 1 of Council Directive (EU) 2025/516 of 11 March 2025, which forms part of the ViDA package. It is intended to prepare Luxembourg businesses for the European Union’s mandatory digital reporting requirements for intra-Community transactions, scheduled to apply from 1 July 2030.
According to the explanatory memorandum, the reform aims to modernise invoicing and accounting processes, support automated invoice processing and reduce administrative costs while maintaining compatibility with future EU reporting obligations.
Mandatory structured electronic invoices
Under the proposal, a compliant electronic invoice must be issued, transmitted and received in a structured electronic format that allows automatic electronic processing.
The bill specifies that documents such as PDF files, Word documents and image files would not qualify as compliant electronic invoices, even if they are readable by recipients. Instead, invoices must comply with the European electronic invoicing standard and use one of the syntaxes published in the Official Journal of the European Union.
Scope of the new rules
The mandatory e-invoicing requirement would apply to invoices issued by suppliers established in Luxembourg to recipients established in Luxembourg where the place of taxation is in Luxembourg.
The proposal excludes certain transactions, including invoices issued by persons acting only occasionally as taxable persons, invoices issued to persons who temporarily acquire taxable person status, and Business-to-Consumer (B2C) sales of goods deemed to take place in Luxembourg.
Phased implementation
The legislation separates the obligation to receive compliant electronic invoices from the obligation to issue them.
All taxable recipients covered by the rules would be required to receive and process compliant electronic invoices from 1 January 2028.
A transitional period would permit the use of alternative non-automated solutions until 30 June 2028 for medium and large entities that exceeded at least two of the following thresholds at the end of 2026:
- Balance sheet total of EUR 7,500,000;
- Net turnover of EUR 15,000,000; or
- 50 full-time equivalent employees.
Small entities, or businesses unable to provide 2026 financial figures, could continue using transitional solutions until 31 December 2028.
The obligation to issue compliant electronic invoices would take effect from 1 July 2028 for medium and large businesses meeting at least two of the size criteria. All other businesses would be required to comply from 1 January 2029.
Common delivery network
The proposal establishes the Réseau de livraison commun as the standard infrastructure for exchanging compliant electronic invoices.
The network is intended to support national and cross-border interoperability while meeting requirements relating to security, encryption, data integrity, digital sovereignty, GDPR compliance and electronic registered delivery service standards.
Government ministries and administrations would exchange invoices through a dedicated access point linked to the central government’s salle de courrier digitale du gouvernement central.
For businesses with limited invoice volumes or without automated connections, manual alternatives, including web-based services on MyGuichet.lu, would remain available during the transition.
To encourage automated electronic exchange, the bill introduces a progressive droit d’usage where regulatory invoice volume thresholds are exceeded when using these alternative solutions. The proposed charges are:
- EUR 2 (excluding VAT) per invoice for the first 20 invoices above the threshold;
- EUR 3 per invoice for the next 30 invoices;
- EUR 4 per invoice for the next 50 invoices; and
- EUR 5 per invoice for each additional invoice.
The usage fees would apply equally to both issued and received invoices. Invoices issued solely to recover the usage fee would be excluded from the calculation.
VAT law amendments
The bill also introduces several amendments to Luxembourg’s VAT legislation to integrate the new e-invoicing framework.
It incorporates the concept of a compliant electronic invoice into the VAT Act and requires any document modifying an original compliant electronic invoice, such as a credit note, to refer unambiguously to the original invoice and be issued in the same structured format.
The proposal further provides that recipient acceptance will not be required where a compliant electronic invoice is mandated by law, creating an exception to the general VAT rule that electronic invoicing requires customer consent.
In addition, the bill confirms that Autofacturation arrangements remain permitted, allowing buyers to issue electronic invoices on behalf of suppliers where the existing self-billing conditions are met.
Businesses would also be required to retain original electronic invoices, and copies where applicable, for 10 years from the date of issue while preserving their authenticity of origin, integrity of content and legibility.
The explanatory memorandum states that the proposed legislation is budget-neutral and is not expected to have any impact on the state budget.
