- Recent rulings from the Court of Justice of the European Union and the Luxembourg District Court impact Luxembourg company directors
- Directors of Luxembourg public limited companies are not considered independent in their duties, thus their activities are not subject to VAT
- Luxembourg VAT authorities updated Circular 781 to Circular 781-2, recognizing directors’ services as economic activities under certain conditions
- Directors’ activities are not viewed as independent due to lack of economic risk bearing, despite autonomy in work organization
- Risk and responsibility are crucial in determining the independence of an economic activity for VAT purposes
- Directors should evaluate their VAT status and consider applying for VAT regularisation if they meet non-independence criteria
- An online regularisation process will be available in the first half of 2025
- Directors can correct their VAT filings for years since 2018, with a deadline of 1 July 2025 for including the year 2019
- Directors need to inform clients about VAT adjustments and refund any overcharged VAT
- Directors should review their expense claims, especially significant investments, for potential tax administration scrutiny
Source: dlapiper.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.
