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V2373-14 4 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · valor normal de mercado

Remuneration of a managing partner for professional services is deductible if valued at market rate

A partner holding a 50% stake in a company and acting as a non-salaried administrator asks whether payments received for regular tax and accounting consultancy services are deductible for Corporate Tax purposes. The DGT rules that they are deductible provided they meet the requirements for accounting entry, accrual, correlation, and substantiation, and that they align with normal market value.

The question raised

1) Whether the amounts obtained from entity C by performing the work on a regular, personal, and direct basis would be deductible for Corporate Income Tax purposes.

The DGT's ruling

Remuneration received by the managing partner for the provision of professional services is tax deductible, regardless of whether its nature is employment-based or commercial. To this end, it must comply with the requirements of accounting registration, accrual, correlation of income and expenses, and documentary justification. Furthermore, as a related-party relationship exists, the valuation of said services must be carried out in accordance with the arm's length principle established in Article 16 of the TRLIS.

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