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V3088-17 28 November 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

VAT applicability to services provided by a shareholder to their company depends on independence or subordination

A shareholder and CEO of a security company sought clarification on whether their management and executive services were subject to VAT. The DGT ruled that VAT applicability depends on whether the relationship is one of employment (not subject to VAT) or independent professional services (subject to VAT), based on an analysis of autonomy, remuneration, and responsibility.

The question raised

Question raised: Liability for the services provided by the applicant to the company of which they are a partner and managing director, holding a relevant stake in the same through another company.

The DGT's ruling

To determine liability for VAT, it must be analyzed whether the partner acts independently or under a relationship of labor subordination. The relationship is labor-based and not subject to VAT if the professional submits to the organizational criteria of the company, does not receive remuneration linked to results, and the company is liable to third parties. Conversely, if the partner organizes their own means, receives remuneration based on profits or invoicing (assuming economic risk), and is liable to third parties, the activity is subject to the tax. The fact that the participation is majority indirectly does not alter these criteria.

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