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V2370-23 4 September 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gasto de personal

Staff costs arising from the delivery of parent company shares are deductible in the year of delivery

A company enquired whether staff costs resulting from an incentive plan involving shares in its US parent company are tax-deductible at the time of delivery. The DGT ruled that if the expense is recorded in the accounts and the shares are delivered, it is deductible under Corporate Tax regulations.

The question raised

Whether, within the scope of Corporate Income Tax and for the purposes of determining the taxable base, the personnel expense that the consulting entity is obliged to record accounting-wise, in accordance with commercial and accounting regulations, derived from the operations of granting equity instruments to its employees granted by its US parent company, is considered a tax deductible expense at the time of the delivery of the shares to the employees, by application of the provisions of Articles 10.3 and 14.6 of the Corporate Income Tax Act.

The DGT's ruling

Personnel expenses arising from payments based on equity instruments, used as remuneration and settled through their delivery, are tax deductible when such delivery occurs. In the case presented, as the parent company's shares are delivered annually without requiring continued employment for their return, the recorded expense is deductible in each fiscal year of delivery in accordance with Articles 10.3 and 14.6 of the Corporate Income Tax Act.

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