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V0971-18 16 April 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa simplificada

Salary and self-employed contributions for a child are deductible if business activity requirements are met

A bar owner inquired whether they could deduct their child's salary and self-employed social security contributions as a business expense. The Directorate General for Taxes (DGT) ruled that these are deductible, provided they meet the requirements of being correlated with income and properly justified as an expense.

The question raised

Deductibility as an activity expense of both the salary paid to his son and the RETA contributions paid by the latter.

The DGT's ruling

Wages paid to the son for his work under a dependency regime and his RETA contributions are deductible expenses. For their deduction, the expenses must be related to the generation of income, proven to have been incurred during the fiscal year, comply with correct temporal imputation, be recorded in the accounting or books, and be appropriately substantiated.

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