

Car purchase taxes in Luxembourg
In this article, we will delve deeper into the Luxembourg car tax system, examining what taxes should be paid, the process to pay them, and other essential considerations for those contemplating buying a car in Luxembourg.
When it comes to taxes for purchasing and registering a car, Luxembourg stands out as a country offering numerous benefits. One of the key reasons why Luxembourg registration is highly sought after is the remarkably low taxation imposed on vehicles. From a fiscal perspective, this translates into substantial savings when compared to neighboring countries.
In countries like France, it is quite common to spot many individuals driving with Luxembourg license plates. The allure of buying a car in the Grand Duchy lies not only in the reduced prices of vehicles, typically around 10% cheaper than in France and Belgium but also in the cost of Value Added Tax.
If you want to learn more about taxes in Luxembourg, you can check our related articles in the section:
Luxembourg — a tax haven in the center of Europe
What taxes are paid for cars in Luxembourg in general
When purchasing a new or used vehicle, certain administrative procedures must be carried out in Luxembourg and three taxes need to be paid as part of this process:
Registration Tax
VAT
Road Tax
These three taxes play a crucial role in the car purchase process in Luxembourg, in the following sections we will examine them one by one.
You can find detailed information about the taxation of cars in the European Automobile Manufacturers’ Association (ACEA) 2022 Tax Guide.
Car registration taxes

When it comes to registering your car in Luxembourg, obtaining a registration tax stamp is a crucial step, demonstrating that you have successfully requested and acquired a plate number while fulfilling the required payment.
The specific amount for the tax stamp depends on the type of registration number plate you choose. There are several options available, each with its associated tax:
- Current series numbers will cost 50 euros;
- Personalized numbers will cost 100 euros (50 euros tax + 50 euros extra fee);
- Using personalized numbers you already bought will cost 74 euros (50 euros tax + 24 euros extra fee).
It is important to note that obtaining the plate numbers is only one part of the car registration process. This does not imply that the vehicle has been registered or that it has been automatically granted registration authorization. It simply reserves the selected number for future use.
Once you have the tax stamp you need to complete all the formalities to obtain the necessary documents for registration. When you have them all, take them to the SNCA to start the registration process.
Read further about registering a car in the Grand Duchy in our dedicated guide: How to register a car in Luxembourg.
Car registration and taxes when importing a car
If you're purchasing a new or used vehicle from a country outside the European Union (EU), you'll need to carry out certain customs clearance formalities to register it in Luxembourg. These formalities include customs formalities for the payment of customs duties and the VAT if it’s a new car.
To clear the vehicle, you must bring it to one of the customs offices of the Customs and Excise Agency in person to obtain a 705 sticker. This sticker is a document proving that the vehicle is in order regarding VAT and is required for registration.
You will need to bring the originals of the following documents to the Customs and Excise Agency (they will give them back to you later):The Certificate of Conformity (COC).
- An invoice or a sales contract.
- The registration number you have reserved.
- The previous registration certificate (if the vehicle has already been operated)The insurance certificate.
- Your national identification number or tax registration number.
Customs duties are 10% of the purchase price of the vehicle plus certain expenses and VAT, which must also be paid for new cars, is 17% of the purchase price.
Customs duties and VAT can be an important amount so be sure to factor that into your plans.
VAT for car purchase in Luxembourg
In this section, we will explore important aspects related to the Value Added Tax (VAT) when purchasing or importing a vehicle in Luxembourg. We will discuss when the VAT should be paid, and which country holds the responsibility for VAT payment. Additionally, we will highlight the specific office where individuals should go to pay the VAT and obtain the necessary compliance documentation.
When to pay the tax and what is the amount
When purchasing a new or used vehicle in Luxembourg or another European Union member state, there are different cases regarding the payment of VAT. There are a few specific scenarios:
Buying a used vehicle from a private individual
Buying a used vehicle from a professional dealer
Buying a new vehicle
The VAT in Luxembourg is 17% and the calculation should be based on the total price of the vehicle, including any accessories and associated costs, such as delivery fees.
Where to pay VAT for a car in Luxembourg
When purchasing a new vehicle in Luxembourg, you will typically pay the VAT directly to the dealer at the time of purchase. However, in addition to this, you will need to visit the Customs and Excise Agency to obtain a 705 sticker. This sticker serves as proof of VAT compliance and is necessary for vehicle registration.
In which country to pay VAT when buying a car abroad
The VAT should be paid in the country where you intend to register the vehicle. For importing a vehicle from another EU country, you must inform the dealer that you plan to register the vehicle in a different country to avoid paying the VAT in the country of purchase.
Once you have imported the car, you will need to bring the purchased vehicle to one of the Customs and Excise Agencies to pay the Luxembourg VAT and obtain the 705 sticker, needed for further registration.
In some cases, even if you inform the dealer that you plan to export the vehicle, they may require upfront VAT payment assuring you of a later refund. If this occurs, ensure that the dealer provides a clear document outlining the conditions for reimbursement.
If you accidentally paid VAT twice (for example, once in the country of purchase and again in Luxembourg to obtain the 705 sticker), you are entitled to a refund. In such cases, you should contact the seller and the tax authorities of the country where the vehicle was purchased to initiate the refund process.
Luxury car taxes in Luxembourg
Good news for lovers of retro and luxury cars: Luxembourg does not impose any specific taxes on luxury goods and objects. The luxury car brought in Luxembourg will be taxed similarly to the ordinary car: VAT, registration tax, and road tax depending on the emissions. And that is all.
Luxembourg has no luxury car taxes for individuals.
Road taxes in Luxembourg
All vehicles registered in Luxembourg are subject to the road vehicle tax, which must be paid annually to the Customs and Excise Agency. The tax amount varies based on the vehicle's fuel system, either petrol or diesel.
Keep in mind, that the Luxembourg road taxminimum amount stands at 30 euros annually.
For cars registered for the first time in the European Economic Area after the 1st of January 2021, the tax is calculated based on the CO2 emissions value. You can find this information on your certificate of conformity.
The road tax calculation formula: emissions value multiplied by fuel coefficient (0.9 for diesel vehicles and 0.6 for other types) and multiplied by an exponential factor (for CO2 emissions below 90g/km is 0.5, and it increases by 0.1 for every additional 10g/km).
You can calculate the road tax for yourself using one of the Luxembourg car tax calculators available online for convenience and accuracy.
To give you an idea of the Luxembourg road tax value, here is a small table with some examples of popular cars. Keep in mind, that we calculated the yearly tax according to the mean value of the interval in the previous column:
Car model | Body type | Energy type | CO2 emissions (g/km) | Tax |
PORSCHE 718 BOXSTER | Convertible | Essence | 196 - 210 | 207.06 euros |
Ford FOCUS EcoBoost | Sedan | Essence | 180 to 189 | 166.05 euros |
RENAULT SCENIC | Minivan | Essence | 143 - 154 | 98.34 euros |
AUDI A3 Sportback | Sedan | Diesel | 106 - 135 | 98.01 euros |
FORD FIESTA Flexifuel (95ch) | Sedan | E85 | 116 - 138 | 68.58 euros |
TOYOTA Prius Hybride Rechargeable | Sedan | Hybrid | 94 - 107 | 42.42 euros |
TESLA MODEL 3 | SUV | Electric | 0 | 30 euros |
Keep in mind, that we calculated the yearly tax according to the mean value of the interval in the previous column.
Tax deductions for eco-friendly cars in Luxembourg

For several years in Luxembourg there have been tax deductions or financial aid to encourage the purchase of environmentally friendly cars. These measures change over time, from August 1, 2024, the subsidies for green cars in Luxembourg change again as part of the program “Klimabonus Mobilitéit”. From this date the measures in force are as follows:
- Subsidies for new electric cars: for new 100% electric cars with an energy consumption of less than 160 Wh/km there is a subsidy of 6,000 euros, and for new electric cars with a consumption of between 161 Wh/km and 180 Wh/km there is a subsidy of 3,000 euros.
- Subsidies for used electric cars: a new bonus of 1500 euros is introduced for used electric vehicles over 3 years old, provided that the buyer keeps the vehicle for at least two years and does not belong to the same household as the seller.

Frequently Asked Questions (FAQ)
What are the advantages of buying a car in Luxembourg in terms of taxes
What taxes do I need to pay when purchasing a car in Luxembourg
Are there any tax deductions available for eco-friendly cars in Luxembourg
Do I have to pay Luxembourg VAT if I purchase a car in Luxembourg but register it in another country
Source: editus.lu, guichet.public.lu, guichet.public.lu, europa.eu, acea.auto
We took photos from these sources: Daniele Buso for Unsplash, Viktor Bystrov for Unsplash, Chuttersnap for Unsplash



