This judgment addresses whether the remuneration of a director for activities as a member of a legal person’s body constitutes remuneration for an independent economic activity under VAT law. Most EU Member States do not consider this compensation as remuneration for an independent economic activity, except in 6 MemberBTW jurisprudentie States under certain conditions and in Luxembourg in general. In Luxembourg, a member of a legal person’s body must pay and charge VAT. The ECJ ruled that a director of a public limited company in Luxembourg carries out an economic activity under the VAT Directive if they provide services for consideration on a permanent basis and for a foreseeable fee. However, if the director does not act on their own account, under their own responsibility, and does not bear the business risk, then their work is not considered an independent economic activity under the VAT Directive.
Source BTW jurisprudentie
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
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