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V3257-16 12 July 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Services of a partner to a company may be deemed as earnings from work or economic activity depending on their social security regime

A lawyer and administrator of two companies asks how their services are taxed under IRPF and VAT. The DGT clarifies that the nature of their income under IRPF depends on whether the activity is professional and on their registration in Social Security, while under VAT the key factor is whether they act independently or under subordination.

The question raised

A consultation is made regarding the taxation applicable to the taxpayer in Personal Income Tax and Value Added Tax for the services provided to both companies.

The DGT's ruling

In Personal Income Tax, remuneration for director functions constitutes employment income; if the position is unpaid, no income is imputed. For other services, if the company is a professional services firm and the partner is under the self-employed regime, it shall constitute income from economic activity; otherwise, it shall constitute employment income. For VAT, liability depends on whether the partner acts with independence or subordination, analyzing their working conditions, remuneration, and responsibility.

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