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V0848-14 26 March 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · retribución de administradores

Director's remuneration is deductible if the articles of association set the remuneration system and the General Meeting approves the amount

A query was raised regarding whether establishing in the articles of association that a director's position is remunerated is sufficient to deduct the salary for Corporate Tax purposes, or if the annual amount must be specified. The DGT ruled that deductibility depends on the statutory remuneration system complying with the Capital Companies Act and the General Meeting fixing the amount for each financial year.

The question raised

Whether, in order for the sole administrator's remuneration to be deductible for Corporate Income Tax purposes, it would suffice to indicate in the articles of association that the position is remunerated as agreed annually by the General Meeting of Shareholders, or whether said amount would have to be specified year by year in the articles of association.

The DGT's ruling

The expense for the administrator's remuneration shall be tax deductible provided that it meets the conditions of accounting registration, accrual, correlation of income and expenses, and documentary justification. To this end, the remuneration system must be established in the articles of association in accordance with Article 217 of the TRLSC. In limited liability companies, if the remuneration is not based on profits, the amount must be fixed by the general meeting for each financial year without exceeding the approved amount.

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