Skip to content
Back to index
V1396-20 13 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRNR · retribución en especie

Travel and accommodation costs for a non-resident director not considered income

A Spanish company asked whether transport, maintenance and lodging paid directly to enable its director resident in Italy to carry out duties in Spain constitute income in kind. The DGT responds that if there is no particular benefit to the director, there is no income for the non-resident taxpayer and no obligation to withhold tax.

The question raised

Question raised 1) Whether the travel, subsistence, and accommodation expenses incurred by the consulting entity in order to provide its non-resident Managing Director in Spanish territory with the means to perform the duties inherent to their position do not constitute benefits in kind for them and, consequently, are not subject to Non-Resident Income Tax, which excludes the obligation of the consulting entity to make payments on account of said Tax in connection with these payments.

The DGT's ruling

Payments made directly by the entity to provide the necessary means for the performance of the director's duties do not constitute income for the director, provided that no particular benefit is derived by them. In such a case, there would be no obligation to withhold Non-Resident Income Tax. Regarding Corporate Income Tax, these expenses are deductible if they comply with the requirements of accounting entry, accrual, correlation of income and expenses, and substantiation of the reality of the transaction.

Free assessment and quote