Germany’s federal Ministry of Finance (MOF) published a circular dated 8 July 2021 that updates the VAT treatment of members of an entity’s supervisory board, in response to case law of the Court of Justice of the European Union (CJEU) and Germany’s federal tax court (BFH) that limits the circumstances in which supervisory board members are treated as taxable persons for VAT purposes. According to the circular, supervisory board members that do not bear any remuneration risk because they receive non-variable fixed remuneration are not self-employed and are not acting as a taxable person for purposes of the VAT rules; accordingly, their services performed as a supervisory board member are not subject to VAT. The circular also clarifies the circumstances in which remuneration is considered to be “fixed,” among other things.
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See also C‑420/18 (IO) – Judgment – Member of Supervisory Board is not a VAT taxable person
