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V1765-14 4 July 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Collective insurance premiums paid by an entity to a director are treated as benefits in kind

An entity sought clarification on whether collective insurance premiums contracted for its directors under a commercial relationship should be classified as pension commitments. The DGT has determined that they do not constitute pension commitments and that such premiums are considered benefits in kind for the director.

The question raised

Tax imputation to the director of the premiums paid by the entity under the insurance contract.

The DGT's ruling

Remuneration for directors and members of boards of directors is considered employment income, regardless of its commercial nature. The payment of insurance premiums by the entity in favor of the director constitutes income in kind. The applicable withholding tax rate for this income is 35%, unless the increase provided for in the thirty-fifth additional provision is applied for the 2012 to 2014 periods.

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