As a reminder, the CJUE decided in this case that remuneration received by a director for his activity as a member of the board of directors of a Luxembourg société anonyme is not subject to VAT. Please refer to our previous newsflash dated 21 December 2023 for more background in this respect.
Who is concerned by the regularisation?
- Luxembourg directors who provided services subject to VAT to companies having no or partial recovery right
(Management services rendered to investment funds qualifying for the VAT exemption under article 44.1.d of the VAT law are therefore not concerned);
- Companies who have self-assessed Luxembourg VAT on directors' fees and which have no or a partial recovery right.
How?
In the Newsletter, the tax administration clarifies the following:
- An ad-hoc procedure (specific to the regularisation of director fees) will be published and made available on myGuichet;
- As already specified in Circular No. 781-1 issued on 22 December 2023, the tax authorities are looking for the implementation of non-bureaucratic regularisation process of the VAT unduly paid;
- From a practical point of view, if invoices were issued by the director, corrective invoice may have to be reissued without VAT;
- Although regularisation can in principle only be made for the period that is not closed on the basis of the statute of limitation meaning that the 2018 would be closed, the State of Luxembourg waived the statute of limitation for the year 2018.
We will follow-up when the procedure is made available by the tax administration.
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.
