The ECJ ruled that a member of a supervisory board or board of directors must carry out their activities in their own name, for their own account, and under their own responsibility to be considered as carrying out an independent economic activity subject to VAT. The case involved TP, a lawyer who is a member of the board of directors of four Luxembourg public limited companies. The ECJ found that TP does not bear the economic risk associated with the activities, as the company itself confronts any negative consequences of the decisions adopted by the board. Even the percentage fee received by TP does not involve any personal risk of profit or loss. This ruling has implications for the practice, as it clarifies that variable remuneration alone does not necessarily lead to an economic risk for board members. The decision emphasizes the need to analyze national regulations to determine whether a board member carries an economic risk in their activities.
Source KMLZ
See also
- ECJ Case C-288/22 (Administration de l’Enregistrement, des Domaines and de la TVA) – Judgment – Member Board of Directors is taxable person upon consideration & permanent activity
- Roadtrip through ECJ Cases – Taxable person (Art. 9)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
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