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 – further to the
comments made by Mr. Heinen – that the necessary
clarifications and adjustments should be part of
