The principle of serving on a foreign board

Living in Belgium and serving as a director of a foreign company raises specific tax questions. In this 1-minute Q&A, BDO expert Lien Maerevoet explains where your remuneration can be considered taxable, how the roles differ and what to think about before taking on a board mandate abroad.  
 

 
Where is director's remuneration taxable?

It depends on the wording of the relevant double tax treaty, in principle article 16. In general, director's fees received for board mandates are taxable in the country where the company paying the fees is located. If you're appointed as a managing director with daily management responsibilities, different rules may apply. In that case, the taxation often depends on the physical location from which you perform your activities.

Director or managing director

A director holds a board mandate and performs mainly strategic activities. A managing director has significant decision-making authority and is responsible for the day-to-day management of the company's operations. Each country has its own laws setting out the general duties, responsibilities and powers of managing directors. Titles and roles can also vary from one company to another, and there is no universal standard across countries.

Points of attention when serving on a foreign board as director

Directors who live in one country but serve on boards in another can trigger withholding tax, payroll and reporting obligations across multiple countries. A proper analysis of the nature of the role and the local qualification of the mandate is needed to ensure correct taxation and avoid inefficiencies.

Taking on a mandate abroad? Connect with BDO expert Lien Maerevoet to make sure your role is qualified and taxed correctly.