European Court of Justice Rules on VAT for Director Services in Luxembourg

• The European Court of Justice issued a judgment on Luxembourgish VAT rules for director services.
• The judgment was made in Case No. C-288/22.
• The taxpayer provided board of director services to several companies and received fees based on the companies’ profits.
• The Luxembourgish Tax Authority issued a VAT assessment on the fees.
• The ECJ held that a member of the board of directors of a public limited company carries out an economic activity when they provide services to the company for a fee.
• The activity is considered an economic activity if it is provided on a continuing basis and for a foreseeable fee.
• The board of directors member is not considered to carry out the activity 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.
• Despite this, the director is free to arrange how they perform their work, receives the fees as income, acts in their own name, and is not subject to an employer-employee relationship.

Source: news.bloombergtax.com

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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