Pommerloch was not a sightseeing stop for us. We stopped here for a much more ordinary reason: to do our grocery shopping. Yet this small Luxembourg village, only a few kilometres from Belgium, turned out to be a particularly good place to understand something that is visible all along the country’s borders: Luxembourg and Belgium may belong to the same European single market and use the same currency, but the taxes included in the price of what we buy are far from identical.
That difference has helped turn Pommerloch into a major shopping point for a place of its size. The large retail zone on Route de Bastogne includes the Knauf Shopping Center, with more than sixty shops and around 1,200 parking spaces. This is an unusually large concentration of retail for such a small settlement, but its position explains a great deal. Bastogne is only a short distance away in Belgium, and people living on either side of the border can cross it without any customs checkpoint or currency change.
For us, it simply meant being able to stop and buy the food and other things we needed before continuing our journey. But the prices on the shelves are the result of two different tax systems operating almost next to each other.
The first important difference is VAT. Luxembourg currently has the lowest standard VAT rate in the European Union: 17%. Belgium’s standard rate is 21%. Luxembourg also has rates of 14%, 8% and 3%, depending on the type of product or service, whereas Belgium mainly uses 21%, 12% and 6%.
For ordinary shopping, the most interesting comparison is food. In Luxembourg, food intended for human consumption is generally subject to the 3% super-reduced VAT rate, with alcoholic drinks excluded. In Belgium, most ordinary food and non-alcoholic drinks are generally taxed at 6%.
The difference sounds small, but it is very easy to see what it means. If exactly the same basket of ordinary food had a pre-tax value of €100, VAT alone would bring it to about €103 in Luxembourg and €106 in Belgium. For an ordinary product taxed at the standard rate, €100 before VAT would become €117 in Luxembourg and €121 in Belgium.
That does not mean that everything in a Luxembourg supermarket is automatically cheaper than in Belgium. This is an important distinction. VAT is only one part of the final price. The retailer’s purchase price, salaries, rents, logistics, competition, promotions and commercial strategy all matter as well. Luxembourg has high wages and generally high living costs, so an individual product can quite easily cost more in Luxembourg even when the tax rate on it is lower.
This is why comparing a Belgian and a Luxembourg supermarket cannot be reduced to saying that one country is simply cheaper. For basic food, Luxembourg begins with a three-percentage-point VAT advantage, but Belgian supermarket competition or a particular promotion can more than cancel that difference. For products taxed at the normal rate, Luxembourg has a four-percentage-point VAT advantage, but again that is not large enough to guarantee a lower shelf price.
Fuel is where the border difference becomes far more obvious.
Petrol and diesel are not taxed only through VAT. They are also subject to excise duties and other energy-related charges, and those taxes are set nationally. European rules establish a common framework and minimum levels, but individual countries can still impose very different actual rates. Luxembourg has traditionally chosen a lighter tax burden on road fuel than Belgium, and that has created the familiar phenomenon of Belgian drivers crossing the border to fill their tanks.
The difference was particularly striking around the time of our journey in September 2026. On 4 September, a fuel station in Pommerloch itself was displaying a comparison between Luxembourg and Belgian prices. Diesel was €2.024 per litre in Luxembourg against €2.386 in Belgium, a difference of 36.2 cents per litre. Euro 95 E10 was €1.868 against €2.058, a difference of 19 cents, while Super 98 was €2.060 against €2.234.
On a 40-litre fill, the difference shown by the station amounted to about €14.48 for diesel, €7.60 for Euro 95 and €6.96 for Super 98. For a motorhome with a considerably larger tank, the difference can obviously become much more significant.
Part of the 2026 situation was also temporary. From 1 July to 31 December 2026, the Luxembourg government introduced a measure worth 5 cents per litre including tax to limit the increase in petrol and diesel prices, implemented through a reduction in excise duties when the required price conditions were met. It therefore reinforced an existing tax difference at exactly the time we were travelling through the country.
Belgium, meanwhile, operates an official maximum-price system for petroleum products. In early September 2026, its official maximum prices were above €2 per litre for ordinary petrol and substantially above €2.30 for diesel. Actual stations can sell below the maximum, but the comparison still explains why the Luxembourg side of this border attracts so much fuel traffic.
The same principle applies to other products subject to excise duties. Tobacco, alcoholic drinks and energy products are not governed merely by the VAT percentage printed on a receipt. They carry specific excise taxes, often calculated according to quantity, strength or product category rather than simply as a percentage of the selling price.
Luxembourg’s tax structure on tobacco has long been one of the reasons cigarettes and other tobacco products attract cross-border customers. Alcohol is more complicated because the tax depends heavily on what is being bought. Beer, spirits, intermediate products and wine do not all carry the same excise treatment, so it would be wrong to say that every alcoholic drink is automatically cheaper on the Luxembourg side.
There is another important point which makes shopping in Pommerloch particularly easy: there is no normal customs border between Luxembourg and Belgium. Both countries are EU members. A private individual can drive from Belgium into Luxembourg, buy ordinary goods for personal use, pay the Luxembourg price including Luxembourg VAT, put the shopping in the car and drive back into Belgium without stopping at customs and without paying Belgian VAT again.
The same basic rule applies in the opposite direction. For ordinary personal purchases, the tax is already included in the price in the country where the goods were bought.
There are special rules for certain cases, particularly new vehicles, commercial transactions, distance sales and large quantities of excise goods. Alcohol and tobacco carried by private travellers must genuinely be for personal use rather than resale. EU authorities use indicative quantities when deciding whether a purchase still looks personal — for example 800 cigarettes, 90 litres of wine or 110 litres of beer — but these are primarily reference levels for assessing the purpose of the goods rather than an ordinary shopping allowance comparable with entering the EU from a non-EU country.
For normal groceries, clothes, household products and other everyday purchases, none of that complicates a stop like ours in Pommerloch. We could simply shop on the Luxembourg side and continue travelling.
That is also why the border here can be surprisingly difficult to notice if nobody points it out. The roads remain open, the currency stays the euro and there is no customs building where everyday travellers have to stop. Economically, however, crossing those few kilometres can alter the tax contained in almost everything being sold.
Pommerloch has developed in precisely that environment. It is not a large historic town that later happened to acquire a shopping centre. The enormous retail presence makes sense because the village sits on one of the routes connecting northern Luxembourg with Bastogne and the Belgian province of Luxembourg. A substantial part of the potential customer base therefore lies on both sides of an international border.
For us, the stop remained very simple: we needed to do the shopping, so we stopped in Pommerloch and did it. There is no reason to turn that into a more elaborate travel story than it was. But it was one of the places on our Luxembourg route where an everyday activity revealed something quite distinctive about the country.
The basic food in our trolley could be taxed at 3% only a few kilometres from Belgian supermarkets where most equivalent food carries 6% VAT. A non-reduced product could carry 17% instead of 21%. And at the petrol station the difference was not a few cents on a complete purchase but, at that moment, as much as 36 cents on every litre of diesel.
That does not make Luxembourg universally cheaper than Belgium, and the actual supermarket bill still depends heavily on which products and shops are compared. But it does explain why places such as Pommerloch have become major cross-border shopping centres despite their tiny local population.
In Pommerloch, the Belgian border is almost invisible on the road. At the checkout and at the fuel pump, however, it is much easier to see.