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V0973-19 7 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Taxation of services by a partner depends on their administrative role and independence from the company

An engineer and majority partner asks how to tax the services he provides to his own company under IRPF and VAT. The tax authority determines that administrative payments are income from work, while the nature of other services depends on whether there is a relationship of subordination or independent economic activity.

The question raised

The taxpayer inquires regarding the taxation applicable to them in Personal Income Tax and Value Added Tax for the services provided to the company.

The DGT's ruling

In Personal Income Tax, remuneration for the position of administrator constitutes income from employment, unless it is gratuitous. Professional services provided to the company shall constitute income from economic activities only if the partner is registered in the special regime for self-employed workers and the activity is inherent to the company. Regarding VAT, liability depends on whether independence or subordination exists, analyzing the organization of resources, economic risk, and liability towards third parties.

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