Adult children collaborating in a parent's business: treatment under the objective estimation method

The Directorate General of Taxes (DGT) has issued a relevant criterion for taxpayers carrying out economic activities under the objective estimation method who have the collaboration of family members. The inquiry focuses on determining the tax nature of an adult child providing services in their parent's business activity.

What the DGT has resolved

The administration has established that, within the framework of the objective estimation method, the holder of the activity holds the status of non-salaried personnel. Consequently, any other person working in said activity acquires the status of salaried personnel.

In this sense, as the child is an adult, their participation must be counted as salaried personnel following the quantification rules established in Annex II of Order HFP/1359/2023. Likewise, the DGT points out that the child will have full income from employment for the amounts received in their capacity as a collaborator, given that they do not carry out an economic activity on their own account.

What it means for you

This criterion has a direct impact on self-employed individuals who use the objective estimation method and include family members in their cost structure. The distinction between salaried and non-salaried personnel is fundamental for the correct calculation of the net income of the economic activity.

For the holder of the activity, including an adult child as a collaborator implies that they must be treated under the rules of payroll or employment, affecting the quantification of income according to current regulations. For the child, the receipt of these amounts will be integrated into their own income tax return as income from employment.

What should be done

It is necessary to verify that the inclusion of family collaborators in the economic activity strictly complies with the regulations for objective estimation. It must be ensured that the quantification of salaried personnel complies with the provisions of Order HFP/1359/2023 to avoid discrepancies with the Tax Administration. Since each family and economic situation presents particularities, it is necessary to assess the composition of the workforce and the taxation regime applied in each specific case.