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V0642-16 16 February 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Services from a partner to the company may constitute income from work or economic activity

The DGT clarifies how such services are taxed in IRPF and whether they are subject to VAT, stating that IRPF classification depends on meeting criteria for economic activity and social security, while VAT treatment requires assessing the partner's independence.

The question raised

Consultation regarding the taxation under Personal Income Tax (IRPF) of the remuneration corresponding to the services provided by the partner to the company, taking into account the new wording given to Article 27 of the Personal Income Tax Law by Law 26/2014.

The DGT's ruling

In Personal Income Tax (IRPF), remuneration for director functions constitutes income from employment, unless the company makes no payment. Professional services provided to the partner shall constitute income from economic activity if the company is engaged in professional services, the partner performs the activity that is the object of the entity, and is registered in the self-employed regime. Regarding VAT, liability depends on whether the partner acts with independence or subordination, analyzing the organization of own means, economic risk, and liability towards third parties.

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