VAT on remuneration and reimbursement of expenditure of a mandate

• VAT on Remuneration: Under the General Sales and Services Tax (LIVS), remuneration received by a mandatary for services rendered is subject to VAT, requiring the issuance of an appropriate invoice as per the relevant legal articles.
• Expense Reimbursements: Reimbursements for expenses incurred by a mandatary on behalf of the principal are not subject to VAT, provided they meet specific criteria. Internal documentation suffices for these transactions, eliminating the need for VAT invoices.
• Tax Deduction Guidelines: The remuneration paid to the mandatary can be deducted as an expense in the fiscal year it is paid or owed, while reimbursements can only be deducted by the principal after proper accounting and documentation are provided by the mandatary.

Source Sales and Services – Law on Income Tax – Art. 2 No. 2, Art. 52 et seq. – Law on Income Tax, Art. 31 – Resolution Ex. No. 6080 of 1999 – (Ordinary Official Letter 1394, of 07/24/2025)