Accounting for Freelancers in Luxembourg: What You Need to Know
Mickaël LOC
Chartered Accountant ·
Accounting for Freelancers in Luxembourg: What You Need to Know
As a freelancer in Luxembourg, you must register for VAT as soon as your turnover exceeds €35,000 per year, compulsorily join the CCSS (Luxembourg social security, contributions of around 25 to 30% of net income), and choose between self-employed status in your own name or setting up a SARL-S. Whether you are a consultant, developer, designer, or service provider, here are the essential accounting obligations to master.
Legal status: employee or self-employed?
In Luxembourg, the self-employed status (travailleur non salarié, TNS) allows you to carry out an activity in your own name. You can also set up a SARL-S or a SARL to operate as a company. The choice of status has significant implications for social protection and taxation.
VAT obligations for freelancers
If your annual turnover exceeds €35,000 (VAT exemption threshold in Luxembourg), you must register for VAT with the AED and charge VAT to your clients. Below this threshold, you can benefit from the VAT exemption regime.
CCSS social security contributions for self-employed workers
Self-employed workers are compulsorily affiliated with the CCSS (Luxembourg social security). Contributions are calculated on the basis of net professional income and cover health insurance, old-age pension, and accident insurance. The overall rate is around 25-30% of taxable income.
Are you a freelancer in Luxembourg? Our specialist accountants help you structure your activity, manage your VAT, and optimise your tax situation.
Frequently Asked Questions
What is the VAT exemption threshold for freelancers in Luxembourg?
In Luxembourg, self-employed individuals whose annual turnover is below €35,000 may benefit from the VAT exemption scheme. Above this threshold, VAT registration with the AED is mandatory.
Which social contributions must a freelancer pay in Luxembourg?
Self-employed workers are compulsorily affiliated with the CCSS (Centre Commun de la Securite Sociale). Contributions cover health insurance, old-age pension and accident insurance. The aggregate rate is approximately 25 to 30% of net taxable professional income.
Is it better to operate as a sole trader or to set up a company?
Operating as a sole trader is administratively simpler but offers no protection of personal assets. Setting up a SARL-S limits liability to contributions, may optimise taxation and confers more professional status, at the price of additional administrative obligations.
Which expenses can be deducted as a freelancer?
Deductible business expenses include: IT equipment, software subscriptions, office expenses (home or rented), training costs, business travel expenses, communication costs and contributions to professional organisations.
Must a freelancer keep accounting records in Luxembourg?
Yes, any self-employed person carrying out a commercial activity in Luxembourg must keep accounting records. Depending on the level of activity, simplified accounting (income and expense log) may be sufficient for small structures, but double-entry bookkeeping is recommended.
