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V3451-20 27 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Services of a partner to a company are treated as income from work, not as economic activities

A construction company partner asks whether his services to the company are considered economic activities or as work, and whether they are subject to VAT. The DGT responds that they are income from work and are not subject to VAT since no own means of production are organised.

The question raised

Consultation regarding the taxation applicable to the partner in Personal Income Tax for services provided to the company and their possible liability for Value Added Tax.

The DGT's ruling

Services provided by a partner that do not meet the requirements of an economic activity (organization of own means) are considered income from employment. If the company pays the RETA (Self-Employed Regime) contributions, this constitutes a benefit in kind for the partner. There is no liability for VAT because the partner does not act independently, as they do not organize their own means of production but rather use those of the company.

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