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V0018-16 5 January 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos deducibles

Remuneration for directors is deductible for Corporate Income Tax purposes if legal requirements are met

An agricultural company inquires whether the remuneration paid to its director for managing the company is deductible. The DGT responds that it is deductible provided that it is recorded in the accounts, imputed on an accrual basis, and is not considered a donation or a gift.

The question raised

Question raised 1) Whether the remuneration received for directing and managing the company and for the work performed would be considered a tax-deductible expense for Corporate Income Tax purposes.

The DGT's ruling

Accounting expenses are deductible for Corporate Income Tax purposes if they comply with accounting registration, accrual-based imputation, and are not specifically excluded by law. Remuneration to directors for senior management functions or under an employment contract is not considered a non-deductible donation or gift. For Personal Income Tax purposes, such remuneration is considered income from employment.

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