Accounting obligations of an SME in Luxembourg: the full list

In short. A Luxembourg SME must keep proper books under the standard chart of accounts, PCN 2020, draw up its annual accounts each year, have them approved and file them with the trade register, declare and pay its VAT and taxes, and retain its records for 10 years. Six obligations, each with its own deadlines. Here is the full list, obligation by obligation, without needless jargon.

When you set up or take over a company in Luxembourg, nobody hands you a clear checklist of what to do on the accounting side. You discover the obligations one by one, often when a deadline has already passed. This article gathers what the law actually expects from a Luxembourg SME, in the order it plays out over the year.

1. Keep proper books (PCN 2020)

The first obligation is also the broadest: keep complete and proper accounts of all the company's transactions. The Commercial Code requires double-entry bookkeeping from traders, and most Luxembourg companies apply the standard chart of accounts, the PCN 2020, set by the Grand-Ducal regulation of 12 September 2019. The Guichet.lu portal sets out this baseline.

In practice, this means recording every invoice, every payment, every entry in accounts numbered to a standardised structure. It is not red tape for the authorities: it is what makes the later steps possible, from filing the accounts to the VAT return and the audit file. We detail this structure in our guide on the standard chart of accounts (PCN 2020). Books poorly structured from the outset resurface at every close; kept properly, they run smoothly.

2. Draw up the annual accounts

At the close of each financial year, the company must draw up its annual accounts: the balance sheet, the profit and loss account and the notes. These documents sum up the company's position and its result for the year. Size thresholds (balance sheet total, turnover, headcount) determine whether the company can present abridged accounts or must produce the full layout, and whether a statutory audit is required.

The unavoidable step, for most companies subject to the PCN, is preparing and validating the financial data on the eCDF platform before any filing. This is where the trial balance, the balance sheet and the profit and loss account are put into the standardised format the register expects.

3. Have the accounts approved at a general meeting

Annual accounts are not filed directly. They must first be submitted for approval to the general meeting of members or shareholders, or to the sole member in a single-member company. This approval takes place within 6 months of the year-end close. For a year ending 31 December, the meeting is therefore held by the end of June the following year at the latest.

4. File the accounts with the trade register

Once approved, the annual accounts are filed with the trade and companies register (RCS), where they become public. Filing is done electronically through the LBR website, which manages the RCS, with a LuxTrust certificate. The reference deadline is 7 months after the year-end close, that is, the month following the general meeting.

Mind the delay: the RCS registry applies a late-filing surcharge, which rises with the delay. It is entirely avoidable spending, since the deadline is known a year ahead. We set out how it works in our article on filing annual accounts in Luxembourg.

5. Declare and pay VAT and taxes

Alongside the annual-accounts cycle, the company keeps up its ongoing tax obligations. VAT first: periodic returns (monthly, quarterly or annual depending on turnover) filed on eCDF, as we explain in our guide on Luxembourg VAT returns. Then taxes on the result: the annual corporate return, the well-known form 500, which we cover in our article on the corporate tax return.

These tax obligations have their own channels and deadlines, separate from the register filing. A compliant company therefore juggles several calendars at once, which is why most SMEs hand the whole thing to an accounting firm rather than tracking each date by hand.

6. Retain your records for 10 years

The last obligation, and the longest-running: keep the accounting books and records for 10 years from the close of the year they relate to, with a place of retention in Luxembourg. In the event of an audit, the Registration Duties authority may also request a FAIA file, a standardised export of all the entries of a given year. The practical question of scans, evidential value and destroying paper is covered in our article on retaining accounting records.

What if these obligations are not met?

The consequences are not theoretical. A late accounts filing triggers an automatic surcharge. A tax return not filed exposes the company to an estimated assessment, set on a basis that is rarely favourable. Books that are not kept, or cannot be produced as a FAIA file, weaken the company's position in an audit. And beyond the penalties, a company that does not keep its accounts does not know where it stands: it flies blind, which often costs more than any fine.

How we keep them at Advena

These six obligations form a chain: bookkeeping feeds the annual accounts, which feed the filing, the VAT and the tax return, all of which must then be retained and be retrievable. Neglect one link and everything else seizes up at the close. Our stance is to keep this chain running continuously rather than rebuild it once a year.

We keep your books in the Odoo we configure for the PCN 2020, Luxembourg VAT and the FAIA export. Your bank feeds and supplier invoices flow into the accounts as they come, so the accounts filing, the VAT return and the tax return are all prepared on an already-clean basis. You read your position in real time, not eight months later. All of this sits inside the fixed fee, from 325 € per month, all included, with no surprise invoice for the annual accounts or the return. The detail of this fee is in our article on the cost of an accounting firm.

Who this model is not for

Let's be straight. Our service targets the Luxembourg SME of 1 to 50 employees that wants its books kept, current and steerable. If you are a complex multi-jurisdiction holding with transfer-pricing issues, or you simply want to drop off a box of invoices once a year at the lowest price, another model will suit you better. We would rather tell you at the first meeting. We inform you of your obligations and keep them; we do not replace bespoke legal or tax advice when your structure calls for it.

Frequently asked questions

What are the accounting obligations of a company in Luxembourg?

Keep proper books under the PCN 2020, draw up annual accounts, have them approved at a general meeting, file them with the trade register, declare and pay VAT and taxes, and retain the accounting records for ten years. Each has its own deadlines.

What is the deadline to file annual accounts in Luxembourg?

The accounts must be approved at a general meeting within six months of the close, then filed with the trade register within the following month, that is, seven months after the year-end at the latest. A late filing triggers a surcharge.

Does a small company have the same obligations?

The core obligations are the same, but size thresholds let the smallest entities present abridged annual accounts and exempt them, under conditions, from the statutory audit. Bookkeeping, filing, VAT and retention are still due.

How long must accounting records be kept?

Ten years from the close of the year they relate to, with a place of retention in Luxembourg. A year ending in late 2026 must therefore stay accessible until the end of 2036, including after a change of software.

Is an accounting firm mandatory?

No, the law does not require using an accounting firm. But the company remains bound by all these obligations. Without an in-house accounting team, most SMEs hand them to a firm to secure the deadlines and compliance.

Further reading

• The standard chart of accounts in Luxembourg (PCN 2020): a guide
• Filing annual accounts in Luxembourg: deadlines and late fees
• Corporate tax return in Luxembourg: form 500 and deadlines
• Keeping accounting records for 10 years in Luxembourg
• Accounting firm in Luxembourg: the complete guide for an SME

Why Advena?

We are the only Luxembourg accounting firm that keeps your books in the management tool it deployed for you. All your obligations, from bookkeeping to filing, VAT and the tax return, are tracked in one place, current continuously, with a fee set in advance from 325 € per month and a named manager. We inform you of the rules and keep them for you; we point you to specialist advice when your situation calls for it.