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V1807-22 29 July 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · pagos basados en instrumentos de patrimonio

Staff costs for equity-settled transactions are only deductible upon delivery

A query was raised regarding the tax deductibility of a free equity instrument allocation plan for employees. The DGT ruled that the accounting expense is not deductible in the financial years in which it is recognised but the instruments are not yet delivered; instead, it is deductible in the period when the delivery actually takes place.

The DGT's ruling

Pursuant to Article 14.6 of the LIS, personnel expenses for payments based on equity instruments that are satisfied through the delivery thereof shall be deductible when such delivery occurs. Therefore, in the periods in which the expense is recorded but the instruments have not been delivered, it shall not be tax-deductible and a positive adjustment must be made. The expense shall be deductible in the tax period in which the delivery of the instruments occurs, provided that the vesting conditions are met.

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