On September 17th 2014, the Grand-Duchy of Luxembourg inaugurated its Freeport, a facility constructed at the Luxembourg airport next to the Air Cargo Terminal for storage, handling and trading of goods such as works of art, precious metals, wine, jewellery and other valuable goods.

Within the context of the creation of the Freeport, the Luxembourg government had enacted with the law of July 28th 2011 a particular VAT regime which, in line with EU Customs and Tax Regulations, provides for a suspension of VAT and customs duties on goods introduced into a free zone from third countries or originating in the EU.

"This special regime applies as long as the goods remain in storage in the Luxembourg Freeport."

VAT is also suspended on storage and other value added services while the goods remain in custody at the Luxembourg Freeport. The Luxembourg Freeport is operated under the supervision of the Luxembourg Customs Authorities, which inspect the goods that enter or exit the facility on-site and are endowed with an unlimited right to access the goods. Upon exit of the goods from the Freeport, the temporary suspension of the VAT is to be regularised, which however remains without consequences if the goods are exported outside of the EU.

Source: Mondaq.