VAT Treatment of Company Administrators’ Services: Recent Developments and Potential Impacts

• The Court of Justice of the European Union ruled that the remuneration received by a person serving on a board of directors may not be subject to VAT if they do not bear the economic risk of their activity.
• The Spanish Tax Authority (DGT) adopted the ECJ’s ruling, stating that the activity of a person serving as an administrator or board member of a company is not subject to VAT because they do not bear the economic risk.
• Spanish law holds administrators responsible for any damage caused by acts or omissions contrary to the law or statutes of the company, with the company bearing the consequences of their decisions.
• The DGT’s decision could mean that both individual and corporate administrators may not be subject to VAT, benefiting companies with limited VAT deduction rights.
• Companies are advised to analyze the impact of this decision with the help of their tax department.

Source: audiconsultores-etlglobal.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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