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V3765-15 30 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducibilidad

Remuneration of a partner for tasks other than administration is deductible for Corporate Income Tax purposes

A company inquires whether the remuneration of its sole administrator, who also performs construction work under an employment contract, is deductible. The DGT responds that it is deductible provided that the requirements of accounting registration, accrual, and substantiation are met, as these are considerations for functions distinct from administration.

The question raised

Question raised 1) Whether the remuneration received by the sole administrator for the work performed is deductible for Corporate Income Tax purposes.

The DGT's ruling

Expenses for remuneration of a partner for services other than their role as administrator are deductible for Corporate Income Tax purposes if they comply with accounting registration, accrual, the correlation of income and expenses, and documentary substantiation. These remunerations are not considered gifts, but rather the consideration for functions performed by the partner. For the valuation of such transactions between related parties, the normal market value must be applied.

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