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Gratuity of Management Positions: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 9 rulings · 2016–2022

Current position

For a private entity with a social character to access the VAT (IVA) exemption, management and administration positions must be unpaid. This gratuity must apply to whoever exercises effective management, assuming economic policy decisions and control functions. If the general manager performs these effective management functions and receives remuneration, the entity loses its social character.

The DGT's position remains constant in requiring that management positions be unpaid to maintain a social character. The evolution shows a tightening in the interpretation of the concept of effective management, focusing the analysis on whether the general manager assumes control functions and economic decision-making.

Turning points

  1. V0332-22

    It is specified that gratuity must apply to whoever exercises effective management, including the adoption of economic policy decisions and control functions.

Analysis based on 9 of 9 rulings with a stated position. Updated 30 September 2026.

Rulings on this topic

9

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