Back to index
V2130-18 18 July 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Remuneration for directors and for services other than their office constitutes employment income

A query was raised regarding the type of withholding tax to apply to partners who are also directors and receive a salary for work performed outside their official duties. The Directorate General for Taxes (DGT) ruled that remuneration for director functions is classified as employment income, and that additional services also fall under this category if they do not meet the requirements to be classified as economic activities.

The question raised

Question raised: The type of withholding that must be applied to the remuneration paid to partners for Personal Income Tax purposes.

The DGT's ruling

Remuneration for the exercise of administrative functions constitutes income from employment pursuant to Article 17.2.e) of the LIRPF. Services provided by the partner other than in their capacity as an administrator are also considered income from employment, as the requirements to be classified as income from economic activities under Article 27.1 of the LIRPF are not met. In this case, as there is no remuneration for the position of administrator, the withholding rules of Article 86 of the IRPF Regulation shall apply to the work performed.

Apply this to a real case

What is published here, applied to a company or a specific case. The first meeting is free.

Book a meeting Write to the firm
Email
Contact