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V1234-17 18 May 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción al impuesto

VAT liability for services provided by shareholders to their company depends on independence or subordination

A query was raised regarding whether invoices issued by shareholders to their own company are subject to VAT. The DGT ruled that liability depends on whether the relationship is employment-based (subordinate) or if the shareholder acts independently by organising their own resources.

The question raised

Whether the invoices issued by the partners to the company are subject to and not exempt from Value Added Tax.

The DGT's ruling

To determine liability for VAT, it must be analyzed on a case-by-case basis whether a relationship of subordination or independence exists. The relationship is employment-based and not subject to tax if the partner is subject to the organizational criteria of the company, does not receive remuneration linked to the results of their activity, and the company is liable to third parties. Conversely, if the partner organizes their own means, receives consideration linked to results, and is liable to third parties, the provision is subject to VAT.

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