
Publication
Essential Corporate News – Week ending 23 May 2025
The Companies and Limited Liability Partnerships (Annotation) Regulations 2025 and an accompanying Explanatory Memorandum were published on 14 May 2025.
United Kingdom | Publication | July 2024
The case before the CJEU concerned a director of several Luxembourg limited liability companies, who had received an ex officio VAT tax assessment for the financial year 2019, assessing that VAT was applicable on their director activities. The CJEU was asked the following questions:
On the first question, the CJEU confirmed that the activities of the member of the board directors would constitute economic activities where the member supplies services to that company for a consideration. There must also be a certain degree of continuity and the remuneration (whether fixed or variable), must remain reasonable in relation to the services supplied.
On the second question, the CJEU found that the member of the board of directors does not perform his or her activity independently, as the latter does not bear any personal economic risk associated with his or her mandate, in other words, no personal obligation arises on the part of directors for their commitments to the company, despite the fact that directors are entitled to arrange how he or she perform their duties and are not subject to an employer and employee relationship.
Therefore, although there is a degree of continuity and the remuneration associated with their roles, the CJEU found that board directors do not fulfil the independence criterion required for VAT liability so that their services are not subject to VAT.
The decision of the CJEU could imply that members of the board of directors of Luxembourg companies may not be considered as taxable persons for VAT purposes and therefore directors' fees should not be subject to VAT. While the applicability of this decision depends on a case-by-case analysis, it is worth mentioning that Circular N°781 has now been repealed.
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The Companies and Limited Liability Partnerships (Annotation) Regulations 2025 and an accompanying Explanatory Memorandum were published on 14 May 2025.
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The Regulator’s annual funding statement for private sector DB schemes was published on April 29, 2025. It is the first such statement since the new DB funding regime came into force from September 22, 2024, onwards.
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On April 29, 2025, Minister for Pensions Torsten Bell confirmed that new regulations will be laid in the autumn to allow for multi-employer collective defined contribution (CDC) schemes to be established. The related press release can be read here.
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