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V2278-17 8 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Director's remuneration classified as employment income for Personal Income Tax purposes

A shareholder with powers of representation has requested clarification on how to classify the remuneration received from their company. The Directorate General for Taxes (DGT) has ruled that, when performing director duties, such remuneration constitutes employment income.

The question raised

Classification for Personal Income Tax purposes of the remuneration received by the taxpayer for the purposes of withholding tax on account of Personal Income Tax.

The DGT's ruling

Remuneration received for the performance of duties inherent to the position of director is considered income from employment pursuant to Article 17.2.e) of the Personal Income Tax Law (LIRPF). This remuneration is subject to withholding tax on account of Personal Income Tax in accordance with Article 99 of the same regulation. The applicable withholding rate is 35 percent, or 19 percent if the entity has a net turnover of less than 100,000 euros.

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