ECJ Rules on VAT Liability for Board Members of Luxembourg Companies

• The European Court of Justice (ECJ) was asked to determine whether a member of the board of directors of a Luxembourg company is subject to Value Added Tax (VAT).
• The ECJ has reservations about the independence of the services provided by the board member.
• The ECJ applied Articles 9 and 10 of the VAT Directive in its decision.
• The ECJ concluded that the board member’s activity is considered an economic activity if it is rendered on a continuing basis and in return for foreseeable remuneration.
• The ECJ also determined that the board member’s activity is not carried out independently if they do not act on their own behalf or under their own responsibility and do not bear the economic risk linked to their activity.

Source: blogs.pwc.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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