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V1443-15 8 May 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos deducibles

Remuneration of a partner for non-administrative functions is deductible under specific conditions

The DGT confirms that a single partner's remuneration for commercial activities is deductible under the Corporate Income Tax, provided the accounting registration, accrual, income correlation, and justification requirements are met, and the amount is valued at its normal market rate where a relationship exists.

The question raised

1) Whether the remuneration received by the partner can be considered a deductible expense in Corporate Income Tax.

The DGT's ruling

Expenses for remuneration of partners for functions other than those of an administrator are deductible if they comply with the conditions of accounting registration, accrual basis, correlation of income and expenses, and documentary justification. Given the existence of a related-party relationship, the valuation of these operations must be carried out at their normal market value. For Personal Income Tax purposes, these earnings are characterized as income from employment.

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