As of 1 January 2016, management companies acting as director or liquidator of a company will be subject to VAT for the services they render. The current optional regime will be abolished. For individuals acting as director or liquidator, the situation remains unchanged – they will not be subject to VAT for these services.
Currently, management companies acting as directors or liquidators of companies have the option to invoice for the services they render with or without VAT. The tax authorities had decided to abolish this option regime as from 1 January 2015 (decision of 20 November 2014). As a consequence, such companies would soon have had to comply with all VAT formalities (apply for a VAT identification number, file VAT returns, issue invoices, etc.) and they would have had to charge VAT on all the services they render in this capacity. Due to practical issues (short notice), and interpretation questions that have arisen, the VAT authorities decided to postpone its entry into effect until 1 January 2016 (decision of 12 December 2014). For individuals, everything remains the same: they will not be subject to VAT for the services they render as a director or liquidator of a company.
The abolition of the option regime entails that the companies receiving management services will see their costs increase to the extent that they do not have a full VAT deduction right (e.g. real estate companies, holding companies, insurance companies, financial institutions, hospitals and (other) non-profit organisations). In the future, they will have to pay VAT to the management companies (unless they can benefit from another VAT exemption, e.g. the exemption for the management of certain investment funds), but will not be able to deduct the VAT, or will only be able to deduct a portion of it. It is recommended that the impact of the new regime should be analysed in the course of 2015, ideally before 1 January 2016.