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V0611-16 15 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRPF · rendimientos del trabajo

Professionals' profits may be earnings from work or economic activities

The nature of two partners' income from management and legal services to their own company is examined. The DGT determines that management roles constitute earnings from work, while professional services may be economic activities if specific conditions on activity and social security regime are met.

The question raised

1) The question is raised as to the nature of the income obtained by the person performing management tasks, partner A, and by the person performing legal professional tasks, partner B, for the purposes of Personal Income Tax. If applicable, what would be the withholding tax rate.

The DGT's ruling

Remuneration for director functions constitutes income from employment. Professional services provided by partners shall constitute income from economic activities if the activity is listed in the Second Section of the IAE and the partner is registered under the special regime for self-employed workers or a mutual fund. If both requirements are not met, they shall constitute income from personal employment. For VAT purposes, liability depends on whether the partner organizes their own means or acts with subordination and without economic risk.

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