VAT on director fees: End of the story?

The District Court of Luxembourg (“Tribunal d’arrondissement” or “the referring Court”) has recently requested a preliminary ruling from the ECJ on the topic of the VAT status of a natural person who is a member of the board of directors of a public limited company incorporated under Luxembourg law (“société anonyme”) and the VAT treatment applicable to the remuneration he receives in the form of percentage fees (“tantièmes”).

As the VAT Directive remains silent on the VAT issue of the management of a company, the various EU Member States (“MS”) have tried to address this challenge based on the general VAT rules laid down in articles 9 and 10 of the VAT Directive. Due to the different interpretations made by the EU MS, there is currently a lack of harmonisation on the VAT treatment applicable.

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