- CJEU issued a judgment that director’s fees for activities carried out by a member of a board of directors of a public limited company are not subject to VAT.
- The case involved a lawyer who was a member of the board of directors of several public limited companies.
- The court determined that the existence of an independent economic activity depends on various factors, such as the freedom to arrange work and the bearing of economic risk.
- This decision could relieve many directors of public limited companies from VAT on their fees.
- However, managers in charge of daily operations may still have personal liability for certain debts and may have a higher level of independence.
- The decision must be confirmed by the Luxembourg Tribunal d’arrondissement, but the VAT authorities have already suspended the existing circular.
- There are still unanswered questions regarding the potential retroactive application and scope of the decision.
Source: kpmg.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.
