There were a great many accounting and tax developments in 2016 for directors (natural persons) of Luxembourg companies.
On 30 September 2016, the Luxembourg Land Registration and Estates Department (L’Administration de l’Enregistrement et des Domaines) issued Circular no. 781 in connection with the VAT treatment of directors’ activities. This circular, which is applicable from 1 January 2017, states that the activity of company directors constitutes an economic activity consisting in the provision of services and is therefore taxable for VAT purposes. For further information about these new tax obligations, please refer to our email of 18 January 2017 on the tax reform.
Moreover, the Law of 23 December 2016 introduced an accounting change, which means that directors generating annual revenue of more than EUR 100,000.00 must evidence their income in the form of double-entry accounting, and therefore must produce a balance sheet and an income statement.
This new legislation therefore requires that a new accounting approach be adopted, which must be explained in a letter of engagement adapted to your needs, taking into account an estimate of the assets and liabilities (if applicable) to be included on your balance sheet on 1 January 2017.
Also, if you wish to appoint our fiduciary in this regard to ensure you meet the demands of these legislative changes, please contact your relationship manager. They will provide you with details of the relevant service offering and the list of information and documents required to manage your affairs.
Please contact us if we can be of any assistance in this regard.