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V1127-20 29 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Company payment of RETA contributions may be considered benefits in kind for the administrator

A sole administrator has enquired whether the company can pay their RETA (Special Regime for Self-Employed Workers) contributions and how this affects their Personal Income Tax (IRPF). The Directorate General for Tax (DGT) has ruled that if the company bears this cost, it constitutes a benefit in kind, although it remains a deductible expense for the administrator.

The question raised

Consideration of the payment of RETA contributions as remuneration in kind and a deductible expense for the administrator.

The DGT's ruling

The RETA contributions paid by the company to the administrator constitute remuneration in kind if the entity bears the cost. If the payment is made by delivering the money to the administrator, it is monetary remuneration. In both cases, the contributions are a deductible expense for determining the administrator's net employment income.

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