ERP and accounting software for Luxembourg: TVA, PCN, eCDF

Luxembourg compliance in one view

Keeping the books of a Luxembourg business means charging VAT at 17%, 14%, 8% or 3%, filing VAT returns on the eCDF platform, keeping accounts on the standard chart of accounts (PCN), being able to produce a FAIA audit file on request, and keeping records for ten years. B2B e-invoicing is proposed from 2028 but not yet law. It matters because each obligation assumes a specific ledger structure.

Three administrations share the work. The AED (Administration de l'enregistrement, des domaines et de la TVA) handles VAT. The ACD (Administration des contributions directes) handles corporate income tax, municipal business tax and wage withholding tax. The CCSS (Centre commun de la sécurité sociale) collects social security contributions. Annual accounts are prepared on eCDF and filed with the Trade and Companies Register (RCS), run by Luxembourg Business Registers.

This page sets out what those rules require as of September 2026, where a finance system helps or hinders, and what Skyline Nexus ERP covers for a Luxembourg business today and what is being rolled out.

• VAT authority: AED, returns filed on eCDF
• Direct tax and wage withholding: ACD
• Social security: CCSS
• Accounts: Lux GAAP on the PCN, or EU-adopted IFRS
• Retention: ten years under Article 16 of the Commercial Code

VAT rates and the small-business franchise

Luxembourg has four VAT rates as of September 2026. The standard rate of 17% applies to every supply not covered by another rate. The intermediate rate of 14% applies to goods and services listed in Annex C of the VAT law of 12 February 1979, the reduced rate of 8% to those in Annex A, and the super-reduced rate of 3% to those in Annex B. The annexes, not the product description on an invoice, decide the rate.

The small-business franchise exempts businesses whose annual turnover, excluding VAT, does not exceed 50,000 euro in a calendar year. They charge no VAT and cannot recover input VAT. A business near the threshold needs its turnover monitored during the year, not only at year end.

Luxembourg's economy is unusually cross-border. Services to businesses in France, Belgium and Germany, intra-EU purchases and the reverse charge are daily events rather than exceptions, so tax codes must separate domestic supplies, intra-EU supplies of goods and services, and reverse-charged purchases so that the eCDF return and the recapitulative statement are read directly from the ledger.

• 17% standard rate
• 14% intermediate rate: Annex C
• 8% reduced rate: Annex A
• 3% super-reduced rate: Annex B
• Franchise for turnover up to 50,000 euro

Filing VAT on eCDF

Since 1 January 2020 every VAT return, monthly, quarterly and annual, is filed electronically on eCDF, the government's financial data collection platform. The filing frequency depends on annual turnover excluding VAT: above 620,000 euro, monthly returns; from 112,000 to 620,000 euro, quarterly returns; below 112,000 euro, an annual return only. The AED alone decides the regime, and the monthly regime is the legal default.

eCDF accepts either data typed into its standard forms or an XML file generated by the business's accounting software. For a small company the form is enough; for anyone with volume, a ledger that can produce the return figures by box, with input and output VAT separated by rate and by domestic or intra-EU nature, saves a monthly reconstruction.

E-invoicing: B2G today, a B2B bill for 2028

Public-sector e-invoicing is already mandatory. Under the law of 13 December 2021, every business supplying the State, the municipalities or public establishments must send structured electronic invoices, whatever the amount, and the obligation was phased in by supplier size during 2022 and 2023. Businesses that invoice public bodies only occasionally can submit invoices manually through MyGuichet.lu.

For business-to-business supplies, the government approved a draft law on 17 July 2026 to extend the obligation to domestic transactions between businesses established in Luxembourg, transposing the EU's VAT in the Digital Age directive 2025/516. The bill, number 8815, was deposited in the Chamber of Deputies on 30 July 2026. As summarised by the Chamber, businesses would progressively have to be able to receive and process e-invoices from 2028, and issuing them would become mandatory by 1 July 2028 for large businesses and 1 January 2029 for small businesses. The bill was presented to the Chamber's finance committee on 18 September 2026. A companion Grand-Ducal regulation would set up a common delivery network so that businesses do not need separate, non-interoperable connections.

As of September 2026 this is a bill, not law, and the dates can still change in parliament. We are not going to present it as settled. What is certain is the EU framework: e-invoicing and digital reporting for intra-EU B2B supplies apply from 1 July 2030. The low-regret preparation is data: customer VAT numbers, correct tax codes and invoice lines complete enough to produce an EN 16931 invoice.

• B2G: mandatory for all suppliers to public bodies (law of 13 December 2021)
• B2B: bill 8815 deposited 30 July 2026, not yet adopted
• Proposed: receive progressively from 2028; issue by 1 July 2028 (large) and 1 January 2029 (small)
• Intra-EU B2B: EU digital reporting from 1 July 2030

Lux GAAP, the PCN and the audit threshold

Luxembourg's accounting rules are in the amended law of 19 December 2002 on the Trade and Companies Register and the accounts of undertakings. What makes the country distinctive is the Plan comptable normalisé (PCN), a standard chart of accounts set by the Grand-Ducal regulation of 12 September 2019 and applicable to financial years from 1 January 2020. Commercial companies, traders, EEIGs and branches of foreign companies must use it, with exemptions for traders and partnerships under 100,000 euro turnover, special limited partnerships, supervised financial entities and entities preparing IFRS accounts.

Companies subject to the PCN prepare and validate their balance sheet, profit and loss account and account balances on eCDF, then deposit their annual accounts electronically with the RCS. The PCN is therefore not a suggestion: the account codes in your ledger either map to it cleanly or someone rebuilds the trial balance by hand every year.

Size decides audit. The Grand-Ducal regulation of 25 October 2024 raised the thresholds by 25%, and they can be applied to financial years starting on or after 1 January 2023. A company is small if it stays within two of three limits: balance sheet total 7.5 million euro, net turnover 15 million euro and 50 employees; medium companies stay within 25 million euro and 50 million euro. Companies above the small limits must appoint a réviseur d'entreprises agréé to audit their annual accounts; below them, a supervisory commissaire applies where the company's legal form requires one.

FAIA and ten-year retention

The FAIA (Fichier Audit Informatisé AED) is Luxembourg's version of the OECD Standard Audit File for Tax. It is a structured file extracted from the accounting system that the AED requests during a VAT audit, rather than a return filed on a schedule. Every taxable person with a computerised accounting system must, under penalty of sanctions, supply data electronically when the AED asks, so the practical question is whether your system can produce a FAIA extract in the AED's published structure.

Records must be kept for ten years from the end of the financial year to which they relate, under Article 16 of the Commercial Code. The balance sheet and profit and loss account must be kept as originals; other documents may be kept as faithful copies, including digital copies made under a regular method.

Payroll: CCSS and wage withholding

Employers declare each month's salaries to the CCSS through SECUline or MyGuichet.lu. The CCSS calculates the employer and employee contributions and sends the employer a monthly statement; the employer deducts the employee share from pay and pays the total.

Wage tax is withheld at source using the employee's electronic tax withholding card, which the ACD makes available to the employer. Employers declare the withholding to the ACD, and the tax is paid to the competent tax office within ten days after the end of the declaration period. Because many employees live in France, Belgium or Germany, non-resident withholding cards are an everyday part of Luxembourg payroll.

Cities and regions: where the rules differ

VAT, the PCN and payroll rules are national, so a business in Luxembourg City, Esch-sur-Alzette, Differdange, Dudelange, Ettelbruck, Diekirch, Strassen, Bertrange, Hesperange or Wiltz files the same returns with the same administrations.

The one tax that genuinely varies by place is the municipal business tax (impôt commercial communal). Its base rate is 3%, multiplied by a rate that each commune sets for its own needs; in Luxembourg City the multiplier of 225% gives an effective 6.75%, and the ACD publishes each commune's multiplier every year. The same profit therefore costs a different amount in Esch-sur-Alzette than in Luxembourg City, and a group with companies in several communes should track each one's multiplier.

Language is national rather than regional. Under the law of 24 February 1984, Luxembourgish is the national language, legislation is drafted in French, and Luxembourgish, French and German are all used in administration.

• Municipal business tax: 3% base times a multiplier set by each commune
• Luxembourg City: multiplier 225%, effective rate 6.75%
• Everything else: one national system
• Languages: Luxembourgish, French and German

How Skyline Nexus ERP handles Luxembourg requirements

Skyline Nexus ERP is a cloud ERP with a double-entry general ledger under Fiscal Authority. Its chart of accounts can be imported from CSV or Excel with GL codes, parent codes and posting or heading accounts, so a Luxembourg business loads its PCN-based account structure instead of the built-in Saudi, UAE or generic templates. When the auto-post switches are on, final sales, purchases, payments, expenses and depreciation post balanced journals in the background, with VAT computed per line on 17%, 14%, 8% and 3% rates. The VAT Return screen prefills tax-exclusive bases and VAT for a date range, ready to be entered on eCDF.

Posted journals are corrected by reversal, periods can be closed and locked, and an Accounting Audit Trail records every change with old and new values. Business locations carry their own invoice numbering and a branch-filtered trial balance and profit and loss, which helps a business operating from sites in more than one commune. The trial balance, general ledger and a yearly Audit Pack workbook export to Excel as the working source for eCDF, the auditor and the ten-year archive, and the interface is available in French and German among other languages.

National e-invoicing and filing connectors are being rolled out market by market, and for Luxembourg that programme covers Peppol e-invoicing, the eCDF XML for VAT returns and PCN balances, and the FAIA export: tell us your country and we will confirm your go-live date. Until then, public-sector invoices go through the State's e-invoicing channel or a Peppol provider, and a partner-led integration can read sales and sales returns through the Skyline Nexus ERP Connector REST API. CCSS declarations and wage withholding run in Luxembourg payroll software or through a payroll partner, with the monthly journal posted to the ledger.

Rates, regimes and deadlines in this summary change, and many countries are actively legislating on e-invoicing. This is general information, not tax or legal advice — confirm the current position with the authority named above or with your tax adviser before you rely on it.