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A married couple will establish a vehicle repair company where the husband will be the majority partner and mechanic. It is consulted whether the remuneration received by the husband for his services will be subject to VAT.
Question posed: Whether the remuneration received by the husband will be subject to Value Added Tax.
VAT liability depends on whether the activity is carried out independently or through an employment relationship. To determine independence, the organization of own means, the assumption of economic risk, and liability towards third parties must be analyzed on a case-by-case basis. If the partner is subject to the organizational criteria of the company, does not receive remuneration linked to results, and the company is liable towards third parties, the activity will not be subject to VAT. If the partner organizes their own means, assumes the risk of their results, and is liable towards third parties, the provision will be subject to the tax.
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