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V1764-15 ·3 June 2015 ·consulta-vinculante Medium impact
Tax

Management incentives: non-deductible for Corporate Tax when accrued, but deductible when due; eligible for Income Tax reduction

A company requested clarification regarding the deductibility of a management incentive plan (2014-2018) for Corporate Tax purposes. The DGT ruled that the expense is not deductible through annual accrual, but rather when the incentive becomes due. Additionally, managers may apply a 30% reduction to their Personal Income Tax.

In 6 key points

How it affects those involved

Companies must ensure management incentive expenses are matched to the period when they are legally due to claim Corporate Tax deductions, rather than when they are earned. Managers can benefit from tax relief on these irregular earnings.

Lifecycle

2015-06-03PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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