- The Advocate General of the Court of Justice of the European Union, Juliane Kokott, has opined that a natural person acting as a director of a company is not a VAT taxable person because they do not exercise an economic activity in an independent manner.
- The opinion was given in the case of Mr. “TP,” a Luxembourgish lawyer and non-executive director of several Luxembourg companies, who was assessed by the Luxembourg VAT authorities for not applying VAT on his director fees.
- The AG noted that a director does not act independently and does not bear an economic risk, and that director fees are set unilaterally by the company.
- She also ruled that submitting director fees to VAT would violate the legal principle of neutrality.
- The VAT status of directors varies across EU member states, and a decision from the court is expected at the end of 2023 or early 2024.
Source International Tax Review
See also
- C-288/22 (Administration de l’Enregistrement, des Domaines and de la TVA) – AG Opinion – Member of the Board of Directors of a Public Limited Company is not a Taxable Person
- Roadtrip through ECJ Cases – Focus on ”Taxable person” (Art. 9)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- For an overview of ECJ cases per article of the EU VAT Directive, click HERE
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