Luxembourg to raise VAT, will it be 16 or 17%?

The following was published by the TMF Group, you can see the full link here

Luxembourg has announced that it plans to raise its standard VAT rate to help reduce is deficit.
Currently, the Value Added Tax rate in Luxembourg is 15%, the lowest in the European Union.  Whilst there is no confirmation of what the new rate will be, the government is adamant that it will remain the lowest in the EU.

The rise will probably be to 16% based on previous discussions.  However, it could go to 17% as the next lowest EU rate is 18% in Malta.  Cyprus also has a VAT rate of 18%, although this will rise to 19% at the start of 2014.

Luxembourg is home to the European headquarters of many global companies

Further update;

Luxembourg: VAT rate to be slightly increased from 2015

Grant Thornton Luxembourg report that: On 10 April 2013, the Luxembourg Prime Minister, Mr Juncker, has announced in his “State of the Nation” speech that the Luxembourg standard VAT rate of 15% will increase as from 2015.

This increase will help to offset the planned deficit of VAT revenues in Luxembourg related to the new rules applicable to e-commerce services as from 2015. Indeed, the place of taxation of e-commerce services provided to EU private customers will be the country of the supplier instead of the country of the customer as from 2015.

The Prime Minister has specified that Luxembourg government wishes however to maintain in the future the lowest standard VAT rate in the EU despite the increase. Currently, the lowest VAT rate is Luxembourg (15%). The second lowest VAT rates are applied by Cyprus and Malta (18%). However, the VAT rate of Cyprus will increase to 19% as from 2014. At this stage, there are no other indications regarding the future Luxembourg VAT standard rate except that it will not exceed 18% in order to remain the lowest VAT rate in the EU.