VAT registration within 15 days, the length of your first financial year, your first accounts filing: the real accounting calendar for a Luxembourg company's first twelve months.

The short version. A Luxembourg company's first accounting obligation lands quickly: the initial declaration to the Registration Duties, Estates and VAT Authority is due within 15 days of the start of activity. The first financial year, meanwhile, does not have to run twelve months: your articles of association set its length, and that single choice determines when your first accounts are due. In between sits a year in which almost everything hinges on decisions taken once, then lived with for years.

Setting up a Luxembourg company is well documented right up to the signature at the notary. After that, silence. The director is left holding a trade register extract, a bank account and one simple question nobody answers clearly: what do I have to do, and when? Here is the real calendar for the first twelve months, on the accounting and tax side.

What accounting work does a Luxembourg company's first year involve?

Within 15 days of starting activity, the company files its initial declaration with the AED to obtain a VAT number. It then keeps accounts under the PCN 2020 standard chart, files VAT returns at the frequency assigned to it, closes its first financial year and files annual accounts with the trade register.

The first fifteen days: initial VAT declaration

This is the tightest deadline and the one most often missed. Anyone whose activity makes them a taxable person must in principle file an initial declaration with the AED within 15 days of starting that activity, electronically through MyGuichet.lu or by post. The Luxembourg VAT number issued at the end carries eight digits preceded by the letters LU. Guichet.lu sets out the procedure on its VAT registration page, consulted in July 2026.

Two points worth noting. First, the clock starts at the start of activity, not at the date of incorporation: a company formed in March that begins trading in September counts its fifteen days from September. Second, this is the moment your VAT regime is decided. If your forecast turnover is modest, the question of the small business exemption and its €50,000 threshold arises immediately, and the choice directly affects what you recover on your first investments.

The decision you make once: the length of the first financial year

A Luxembourg company's first financial year does not necessarily run twelve months. Your articles of association fix its opening and closing dates, and this is in practice the only time you choose freely. A company incorporated in October can close on 31 December of the same year, giving a three-month first year, or on 31 December of the following year, giving a long year of roughly fifteen months.

The common reflex is to stretch it, and there is a case for that: a long year avoids producing full annual accounts for a quarter of near-zero activity, and pushes back the first filing. But it carries a cost people forget. For fifteen months you have no approved profit and loss account to show, which complicates a financing request, a tender submission or bringing in a shareholder. If you expect to raise or borrow within eighteen months, a short first year makes sense.

Still drafting your articles? The closing date is chosen now, not later.

Plan your first year

Costs incurred before incorporation

Here is a subject worth a few thousand euros to directors who think of it, and nothing to everyone else. Between the idea and the incorporation, months often pass during which you pay for advice, equipment, a website, formation costs. Those outlays were made for the company's business, frequently on invoices in the founder's name.

Two treatments need separating. On the accounting side, formation costs and expenses incurred on the company's behalf can be attributed to it, subject to supporting documents and a proper recognition entry. On the VAT side, recovering tax on pre-registration expenditure is possible in certain situations, but it follows precise conditions and is settled with the AED at the initial declaration stage, not at closing. Gather those invoices now rather than hunting for them a year later: it is the most profitable recommendation in this article.

Settling into rhythm: VAT, documents, banking

Once registered, the company enters a cycle. Your VAT filing frequency is assigned according to your turnover and revised as the business takes shape, which we cover in our article on Luxembourg VAT returns. In parallel, the accounts must be kept under the PCN 2020 standard chart, and records retained for ten years.

Three habits formed in year one will spare you months of catching up.

  • Keep the flows strictly separate. A dedicated bank account, no personal spending on it, no business spending on the private account. Mixing the two is the leading cause of unmanageable year-end files.
  • Digitise documents as they arrive. No shoebox, no "to sort" folder. An invoice you cannot find is a deduction lost and, where relevant, VAT not recovered.
  • Choose your software straight away. Migrating six months of accounts is easy; migrating three financial years is not. The criteria are in our guide to choosing accounting software in Luxembourg.

Closing: annual accounts and your first tax bill

At the end of the first financial year, the company prepares its annual accounts, has them approved by its shareholders, then files them with the trade and companies register within the legal deadlines. Lateness is paid for in surcharges, as we explain in our article on filing annual accounts in Luxembourg.

This is also the moment of the first tax calculation. A Luxembourg company is liable for corporate income tax, municipal business tax and net wealth tax, whose mechanics we set out in our article on Luxembourg corporate tax. Watch out for a classic timing effect: tax instalments are set on the basis of known financial years. A loss-making first year followed by a profitable second one often produces a catch-up assessment that lands at the worst possible moment for cash. Set money aside, even without a notice.

What we do differently in a first year

A young company does not need a balance sheet produced eight months after closing. It needs to know, in November, whether it is on plan. That is why we keep your books in the Odoo we deploy for you, configured from the outset for PCN 2020, Luxembourg VAT and the FAIA export. Your invoicing, your bank feeds and your accounting live in one place, with no rework and no double entry, and you can see your position in real time.

The fixed fee starts from €325 per month, all in: day-to-day bookkeeping, VAT and eCDF filing, annual accounts and filing with the register, payroll, a monthly review with a dedicated account manager and a monthly report. No invoice arrives outside the monthly fee, which matters particularly in a first year, when every question put to a firm billing by the hour becomes a budget decision. We would rather you called.

Who this model does not suit

We are built for a Luxembourg SME of 1 to 50 employees that wants to steer its business. If your project is a multi-jurisdiction holding structure with transfer pricing questions, if your volumes are unusual, or if you want the lowest possible price for dropping off a box of invoices once a year, another model will serve you better. We say so at the first meeting, not the third.

Company being formed or recently incorporated? We will map out your first year in one conversation.

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Frequently asked questions

When should you apply for a VAT number in Luxembourg?

The initial declaration is in principle due to the AED within 15 days of the start of activity, through MyGuichet.lu or by post. The deadline runs from when trading actually begins, not from the date the company was incorporated.

Does the first financial year have to run twelve months?

No. The articles of association set the opening and closing dates of the first financial year, which may be shorter or longer than twelve months. A long year avoids a filing for a barely trading business but delays having approved accounts, which are useful for financing.

Can you recover VAT on costs incurred before incorporation?

It is possible in certain situations, subject to precise conditions and supporting documents. The point is settled with the AED at the initial declaration stage rather than at closing. Always keep the invoices incurred during the preparation phase.

Do you need an accounting firm from day one?

Nothing legally requires it, but the company is responsible for its accounts, VAT returns, annual accounts and taxes from the first day. Without in-house accounting skills most directors outsource, and it is simpler to do so from the start than to catch up a whole financial year.

What does accounting cost for a young Luxembourg company?

The market mostly bills by time spent, without published prices, which makes a first-year budget hard to anticipate. The Advena fixed fee starts from €325 per month, all in, with no hourly billing and no charge outside the monthly fee.

Further reading

Why Advena?

We support Luxembourg companies from their first year, on a fee announced up front from €325 per month, with a named account manager and the books kept inside the management system we deploy for you. You see your figures during the year, not eight months later. The deadlines and procedures cited here come from Guichet.lu and the AED, consulted in July 2026; we inform and point you in the right direction without standing in for tax or legal advice on your particular situation.

Tell us where your company stands and we will tell you what is left to do, and what it costs.

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