Introduction:
VATP037 replaces the previous VATP031 to provide guidance on the VAT implications for natural persons performing the function of a Director on a Board of Directors, following the amendment of Article 3 of the Cabinet Decision No. 52 of 2017.
Key Issue:
Article 3(2) of the amended Executive Regulation, effective from January 1, 2023, states that the functions of a member of a Board of Directors (Director) performed by a natural person shall not be considered a supply of services for VAT purposes.
Summary:
From January 1, 2023, Directors’ services by natural persons for remuneration are not considered a supply of services for VAT. Previously, these services were taxable if provided regularly, ongoingly, and independently, and if the total value of taxable supplies exceeded the mandatory registration threshold.