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V1000-22 5 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Tax liability of a partner's engineering services depends on independence and own resources

The question is whether a partner's remuneration for providing engineering services to their own company is subject to VAT and how it is classified in income tax. The DGT states that for VAT, it depends on whether there is a relationship of subordination or whether the partner acts independently with own resources, while for income tax, the nature of the economic activity is assessed.

The question raised

Question raised: Classification for Personal Income Tax (IRPF) of the remuneration received by the aforementioned partner from the company for the provision of services to it and its liability to Value Added Tax on said provision of services.

The DGT's ruling

For VAT, liability depends on a case-by-case analysis of independence, remuneration, and responsibility, assessing whether the partner organizes their own means and bears the economic risk. If the partner is subject to the company's organizational criteria, does not receive remuneration linked to results, and the company is liable to third parties, it is an employment relationship not subject to VAT. For Personal Income Tax (IRPF), if the company provides professional services and the partner is in the self-employed regime, the income constitutes returns from economic activity.

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