On 21 December 2023, the Court of Justice of the European Union issued its decision on the VAT status of independent directors in the "TP" case (C-288/22).
This long-awaited decision constitutes a true Copernican revolution in the Luxembourg VAT world as the Court concluded that directors' fees do not fall within the scope of VAT as long as directors are not acting independently. Consequently, and in such situations, director fees are therefore no longer subject to VAT.
This decision is in stark contrast with the position of the Luxembourg VAT authorities as reflected in Circular letter no. 781 dated 2016.
Read below the update on director fees, put together by our Partner & Head of Indirect Tax, Thibaut Boulangé, Indirect Tax Principal, Silvin Leibengut and Indirect Tax Directors, Justine Guilluy and Lionel Van der Noot.
To view the full article, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.