- The Court of Justice of the European Union (CJEU) has ruled that directors’ fees received by independent board members of a Luxembourg public limited company are not subject to value added tax (VAT).
- The CJEU clarified that a board member is engaged in an economic activity if they provide services in exchange for remuneration on a continuing basis.
- The activity of a board member is not considered “independent” if they do not act on their own behalf, under their own responsibility, or bear the economic risk associated with the activity.
- The CJEU’s decision contradicts the interpretation of the Luxembourg VAT authority, which had previously stated that directors’ fees were subject to VAT.
- As a result of the CJEU’s ruling, the Luxembourg VAT authority has suspended its previous interpretation and fees are no longer subject to VAT.
Source: ogier.com
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
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.
