Under €100,000 in turnover, a sole trader can keep a simple receipts-and-payments record instead of the standard chart of accounts. A capital company never can, whatever its turnover.
In short. In Luxembourg, a sole trader (a trader who is an individual), a general partnership (SENC) or a limited partnership (SCS) whose annual turnover excluding VAT stays under €100,000 is exempt from the standard chart of accounts, the PCN 2020, and may keep a simplified record of its receipts and payments. This exemption applies to none of the capital companies: not the SARL, not the SARL-S, not the SA. A capital company keeps double-entry books, whatever its turnover. "Simplified" means lighter accounts, not the absence of accounts.
Many people setting up in Luxembourg hear about "simplified accounting" and conclude, a little too fast, that they escape bookkeeping altogether. That is wrong, and the mix-up gets expensive at the first tax return. The real question is not "can I keep it simple" but "do my legal form and my turnover entitle me to". Here is the exact rule, the amounts in force in August 2026, and the line that separates those who can lighten their books from those who never can.
What is simplified accounting in Luxembourg?
Simplified accounting is a chronological record of the receipts collected and the payments made, kept in full and faithfully, without delay. It differs from double-entry bookkeeping, where each transaction is posted to numbered accounts under the standard chart of accounts, with a debit and a credit. The simplified version follows the money in and out; double entry also reconstructs the assets and the result, account by account.
This lighter regime is not open to anyone who fancies it. It stems from the Commercial Code and the amended law of 19 December 2002 on the trade and companies register and on the accounts and annual accounts of undertakings. That law sets who must apply the PCN and who is exempt from it. The Guichet.lu portal sets out this baseline, consulted in August 2026.
The €100,000 threshold and the forms it covers
The exemption rests on two conditions that apply together: the legal form, and a turnover ceiling. Only three categories qualify, and only if their annual turnover excluding VAT stays under €100,000.
| Legal form | Simplified accounting possible? |
|---|---|
| Sole trader (individual, own name) | Yes, if annual turnover excl. VAT < €100,000 |
| General partnership (SENC) | Yes, if annual turnover excl. VAT < €100,000 |
| Limited partnership (SCS) | Yes, if annual turnover excl. VAT < €100,000 |
| SARL, SARL-S, SA (capital companies) | No, never, whatever the turnover |
The ceiling is assessed excluding VAT, over the financial year. A sole-trader craftsman who invoices €80,000 in the year can therefore keep a receipts-and-payments record. If he moves durably above €100,000, he falls under the obligation to keep full books under the PCN 2020. Crossing the threshold is the trigger, not a box to tick.
Why an SARL, an SARL-S or an SA never qualifies
This is the most common misunderstanding, and it often comes from articles written for France or Belgium. The moment you operate through a capital company, simplified accounting no longer exists for you. An SARL, an SA, and above all the SARL-S, often chosen to start small, all keep double-entry books under the PCN 2020 from the first euro of turnover.
The SARL-S is the perfect trap. Its name promises simplicity, and it does simplify formation: capital from one euro, no notary. But once registered, it carries exactly the same accounting obligations as an ordinary SARL. The reduced capital grants no right to lighter accounts. Put another way, a sole trader on €90,000 of turnover keeps lighter books than the smallest SARL-S. The legal form decides, not the size of the activity.
Not sure whether your status opens up simplified accounting? Tell us the form you operate under, and we'll give you a clear answer.
Check my caseWhat "simplified" does not mean
Lightening the books does not mean doing without them, and that is where many go wrong. Even under the €100,000 threshold, a sole trader remains bound by several obligations that are anything but optional.
- Keeping the books. The record of receipts and payments must be complete, chronological and truthful. It is not a spreadsheet filled in from memory at year-end.
- Declaring income. The profit of a sole-trader activity is added to your other income in the personal income tax return, on the progressive scale.
- Handling VAT. Simplified accounting says nothing about VAT. You remain a taxable person, unless you fall under the VAT exemption below €50,000. Note that the VAT exemption threshold (€50,000) and the simplified-accounting threshold (€100,000) are two separate rules, with different amounts.
- Retaining your records. Invoices, statements and supporting documents are kept for 10 years, as for any other business, as we detail in our article on retaining accounting records.
Simplified accounting removes one layer of complexity, that of the standard chart of accounts and double entry. It removes neither the rigour nor the tax deadlines. The full picture of the obligations, for companies this time, is in our guide on the accounting obligations of an SME in Luxembourg.
Should you choose simplified accounting when you qualify?
Being entitled to it does not mean it is always the right call. Simplified accounting suits a stable, low-volume activity with few purchases and readable cash: a consultant starting out alone, a craftsman with no stock, a side activity. In those cases, double entry would be needless weight.
It shows its limits fast once the activity grows denser. A receipts-and-payments record gives no balance sheet, does not track receivables and payables, and says little about real profitability. If you invest, if you grant or receive payment terms, or if you seek bank funding, double-entry books tell a story the simplified version simply cannot. The day you approach €100,000, you may as well prepare the switch rather than suffer it.
What happens when you grow or incorporate
Two events take you out of simplified accounting. The first is crossing the €100,000 turnover threshold durably: the sole-trader activity must then move to the standard chart of accounts. The second is a change of form, when a sole trader decides to house the activity in a company to protect personal assets. On the day the company is registered, simplified accounting stops and the PCN 2020 applies.
That transition is a sensitive moment. You have to draw up an opening balance sheet, set up a chart of accounts, and sometimes catch up on entries a plain record was never meant to document. Books left in a spreadsheet for three years are hard to take over. Anticipating the switch means not paying twice: once for the backlog, then for fixing it.
How Advena keeps your books, simplified or full
Our stance is the same whatever your regime: books kept continuously, not rebuilt once a year. For a sole-trader activity under the threshold, that means a clean record of your receipts and payments, ready for your income tax return, with no over-engineering. For a company, it means double-entry books in the Odoo we configure for the PCN 2020, Luxembourg VAT and the FAIA export, with your bank feeds and invoices flowing into the accounts as they come.
The twin advantage shows most at the switch. Because you read your cumulative turnover in real time, you see the €100,000 threshold coming before you cross it, and the move to the PCN is prepared in the base where your activity already lives, with no scramble. All of this sits inside a fee set in advance, from 325 € per month, all included, with no surprise invoice. The detail is in our article on the cost of an accounting firm, and the overall model in our guide to the accounting firm for an SME. We inform you of the applicable rule; we do not replace tailored advice on the choice of your legal form, which is decided case by case.
Sole trader or company, under or over the threshold: tell us where you stand, and we'll tell you what it costs and what needs keeping.
Talk about your fileFrequently asked questions
Who can keep simplified accounting in Luxembourg?
A sole trader who is an individual, a general partnership (SENC) or a limited partnership (SCS), provided the annual turnover excluding VAT stays under €100,000. These structures are then exempt from the standard chart of accounts and may keep a receipts-and-payments record.
Can an SARL keep simplified accounting?
No. An SARL, an SARL-S or an SA is a capital company and keeps double-entry books under the PCN 2020 from the first euro of turnover, whatever its volume of activity. Simplified accounting is never open to them.
What is the difference between the €50,000 and the €100,000 threshold?
They are two different rules. The €50,000 threshold concerns the VAT exemption: below it, you do not charge VAT. The €100,000 threshold concerns accounting: below it, a sole trader, an SENC or an SCS can keep simplified books. You can fall under one without the other.
Does simplified accounting exempt me from declaring income?
No. The profit of a sole-trader activity is added to your other income in the personal income tax return. Simplified accounting lightens the bookkeeping, not the tax obligations nor the ten-year retention of records.
What happens if I go over €100,000 of turnover?
Crossing the threshold durably moves the activity to full double-entry books under the PCN 2020. It is better to anticipate this switch, because rebuilding books kept until then in a plain record rarely happens without a hitch.
Further reading
- Accounting obligations of an SME in Luxembourg: the full list
- An accountant for self-employed and freelancers in Luxembourg
- VAT exemption in Luxembourg: the €50,000 threshold
- The simplified SARL (SARL-S) in Luxembourg: capital, accounting and cost
- Accounting firm in Luxembourg: the complete guide for an SME
Why Advena?
We keep the books of self-employed people and Luxembourg SMEs in the management tool we deploy ourselves, which makes your position readable in real time rather than a year later. Whether you qualify for simplified accounting or are bound to the standard chart of accounts, the fee starts from 325 € per month, all included, with no hourly billing and no invoice outside the monthly fee. We tell you honestly when your activity is still too light for a fixed fee, and we point you to specialist advice when your situation calls for it.
Simplified or full accounting, we keep your books current all year, on a fee set in advance.
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