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Luxembourg: VAT-free zone regime offers favourable conditions for transactions in high-value goods


Companies and individuals owning (or seeking to acquire) high-value goods should be aware that Luxembourg offers VAT and customs regimes that provide favourable conditions for certain transactions involving such goods.

Luxembourg law provides for a VAT suspension regime for goods introduced into a free zone or free warehouse. When combined with a similar regime applicable for customs duties, this may be particularly attractive for high-value goods. In this environment, the Luxembourg Freeport opened in September 2014. Located at Findel airport, the freeport offers a high-security and high-technology logistics hub within which high-value goods (e.g. art, wines, classic cars, precious metals, jewels, cigars, etc.) may be handled, stored, conserved, traded, restored and exhibited.

Under the tax regime (which is unlimited in time), a VAT and customs duty suspension will apply upon the entry of goods into the regime, as well as to any related transactions carried out during the period of storage (e.g. purchase and sale transactions). Services related to the goods (e.g. storage, restoration, etc.) also are covered by the exemption. It is noteworthy that goods may be temporarily removed for up to an entire year (e.g. for an exhibition in a museum or an art fair) without losing the benefit of the tax regime.

The goods will be subject to VAT and customs duties when they are withdrawn from the free zone, depending on the transaction carried out by the person withdrawing the goods from the regime. The suspension of VAT on all purchase and sales transactions carried out before the goods were withdrawn from the tax regime will end, and VAT will become due.

For example, import VAT will be due in the case of a permanent import into the EU of goods originating from a non-EU country, for both taxable and non-taxable persons. It is worth considering that the EU member state of importation will not necessarily be the one where the importer resides or is established, and this may have an impact on the applicable VAT rate. If the non-EU goods are exported out of the EU, the export would be exempt from VAT. Similar rules will apply to EU goods: when the goods are withdrawn from the VAT regime, they will be subject to VAT depending on their final destination. They may be exported outside the EU exempt from VAT, or sold and transported to a taxable person established in another EU member state who will have to pay the VAT in line with the rules of the member state where the goods are transported.

The VAT-free zone regime allows transactions to be carried out in goods without the immediate payment of VAT. This should help improve the buyer's cash flow, by allowing it to pay the VAT only when the goods leave the regime, and only if the transaction carried out at that time effectively triggers payment of VAT. The regime should be of particular interest for private art collectors, European art galleries and private museums, corporate structures and other vehicles owning high-value goods. An individual analysis of the relevant transactions is recommended, however, due to the diversity of situations and the complexity of the rules.


Raphaël Glohr

Michel Lambion

Raphaël Glohr (, Michel Lambion ( and Cyrielle Gauvin (

Deloitte Luxembourg


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