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V2281-23 28 July 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rentas en especie

Company payment of self-employed social security contributions constitutes benefits in kind for the partner

A partner providing services to a company has enquired whether the company's payment of their Social Security contributions affects their Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that if the company bears this cost, it is considered a benefit in kind, although the partner may still deduct these contributions as an expense.

The question raised

The effects on the taxpayer's Personal Income Tax resulting from the company's payment of Social Security contributions.

The DGT's ruling

If the company pays the RETA contributions of the working partner by assuming their cost, these shall be considered remuneration in kind. In this case, the corresponding withholding tax must be applied by adding it to the value of the income in kind. Notwithstanding, said contributions shall remain a deductible expense for the partner in the determination of their net employment income.

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