Luxembourg VAT On Directors' Fees

The Luxembourg VAT treatment applicable to directors' fees has been the subject of numerous discussions and press articles for the last few weeks.

On 10 February 2016, the Director of the Luxembourg VAT authorities - Romain Heinen - publicly confirmed that Luxembourg VAT should apply to the supplies rendered by directors. Mr Heinen also indicated that this position is not new, as the approach had always been followed by the VAT authorities.

No VAT exemption should therefore a priori apply to directors' fees. However, Mr. Heinen did advocate flexibility from the VAT authorities with regards to previous years, up to 2015.

Considering the issues triggered by the inconsistencies in the tax treatment of directors' fees (between indirect and direct taxes) and the importance of the question, it appears that the Minister for Finance, Mr Gramegna, confirmed -...