Persons who receive director's fees may be taxed in Luxembourg.
As of the first quarter 2019, the declaration of the withholding tax on directors' fees (form 510 bis) can be submitted electronically to the Luxembourg Inland Revenue (Administration des contributions directes - ACD).
Remuneration for the day-to-day management of a company is not covered by the concept of director's fees but this falls within the scope of income from paid employment.
Director's fees from Luxembourg sources paid to persons holding the following positions may be subject to withholding tax:
These incomes are considered to be of indigenous source if the debtor is:
The withholding tax on directors' fees must be declared - on paper or electronically - and paid within 8 days following the date of payment of the income.
The declaration can be sent by the debtor using the specific form or by electronic means.
The electronic transmission of withholding tax declarations for directors' fees via MyGuichet.lu can be made by an intermediary (agent, fiduciary or other) who acts on behalf of the debtor.
The declaration must contain:
The debtor of the directors' fees must indicate, for each beneficiary:
The debtor of the directors' fees is personally responsible for the declaration and payment of the tax which they withheld or should have withheld.
The tax withheld is to be paid in a lump sum, without designation of the beneficiaries of the directors' fees.
The debtor of the directors' fees must keep a withholding register which must list, in chronological order:
In order to ensure the correct and precise collection of the tax deduction on directors' fees, the Luxembourg Inland Revenue can carry out controls regarding the regularity of the withholding tax on directors' fees.
If the tax has not been duly withheld or paid to the competent tax collection entity, the ACD establishes the missing amount, and issues the debtor with a statement indicating the tax charge, unless the tax has been duly declared.
Declaration of the withholding tax on directors fees allocated by the State, the municipalities, Luxembourg public institutes or public or private collective entities with their registered office or head office in Luxembourg
Déclaration de la retenue d'impôt sur les tantièmes alloués par l'Etat, les communes, les établissements publics luxembourgeois ou les collectivités de droit public ou privé
Anmeldung über den Steuerabzug auf Tantiemen, welche vom Staat, von Gemeinden, von öffentlichen Instituten oder Körperschaften des öffentlichen oder privaten Rechts zufließen, sofern diese ihren statutarischen Sitz oder ihre Hauptverwaltung in Luxemburg haben