These past few weeks have brought plenty of news that will impact the Luxembourg VAT practice. Among others, you will find in this alert the latest news on:
- Temporary reduction of the Luxembourg VAT rates
On 20 September 2022, the Luxembourg Prime Minister announced that the Government, the employer representatives and the trade unions reached a gentlemen agreement on an anti-inflation package to help households and businesses and which includes a temporary 1% reduction of the Luxembourg VAT rates.
- Directors’ fees and VAT: potential future changes?
On 29 April 2022, the Luxembourg District Court made a referral to the CJEU for a preliminary ruling on the VAT treatment of activities carried out by a natural person as a member of the board of directors of a public limited company. The CJEU will have to determine whether directors’ fees are subject to VAT or fall outside of the VAT scope.
- No VAT deduction for a holding company on costs contributed to subsidiaries in exchange of a profit distribution
On 8 September 2022, the CJEU decided that holding companies have, under certain conditions, no VAT deduction right on costs contributed to subsidiaries in exchange of a profit distribution.