Until now legal entities serving as board members, directors, or liquidators of companies could choose whether to subject themselves to VAT for the services they rendered. But according to the Belgian VAT administration's published decision ET.125.180 on 20 November 2014, this optional regime will be abolished from 1 January 2015, making these entities liable for VAT mandatorily.
Starting 1 January 2015, these types of legal entities will have to comply with all VAT formalities (registration as a taxable person, invoicing, filing of VAT returns, etc.). Furthermore, from then on, they will have to charge VAT on the services they supply, except if and to the extent that payments for those services have already been received before 2015. Bonuses "tantièmes" granted as of 1 January 2015 will also be subject to VAT, even if they relate to previous financial years.
In the past, many legal entities serving as directors have opted not to subject themselves to VAT in particular if the companies to which they rendered services were not entitled to a full deduction of VAT (e.g., financial institutions, investment companies, hospitals, etc.). These companies now see the cost of such services increased by the non-deductible VAT. Going forward, this may incentivize such companies to appoint individuals (as opposed to legal entities) as their directors because this mandatory VAT imposition only applies to legal entities. In principle, individuals will not be subject to VAT when they serve as directors.
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