In its judgment of 7 February 2025, Spain\u2019s Supreme Court set out clear criteria on the tax deductibility of remuneration received by company directors. The decision reinforces the view that, beyond formal provisions in the articles of association, what matters is whether the payments are real and justified.<\/p>\n
Background<\/strong><\/p>\n In the case examined, the company\u2019s articles of association did not provide for remuneration of the members of the board of directors. Even so, the company had paid certain amounts to three of its senior managers who also acted as directors. The Tax Agency, relying on the absence of a provision in the articles and applying the \u201cdual relationship\u201d theory (under which the senior management employment relationship is absorbed by the directorship), treated these payments as non-deductible gifts.<\/p>\n The Supreme Court\u2019s decision<\/strong><\/p>\n The Supreme Court rejected this interpretation, stressing that the lack of a provision in the articles does not automatically mean that the payments are non-deductible gifts. According to the ruling, the decisive factor is whether the expenses meet the general deductibility criteria:<\/p>\n Once these points are proven, the remuneration is no longer considered gratuitous and may therefore be tax-deductible.<\/p>\n Practical implications for companies<\/strong><\/p>\n This ruling has several consequences for companies:<\/p>\n In short, the Supreme Court\u2019s ruling reinforces the idea that the deductibility of directors\u2019 remuneration depends on its reality and economic justification, beyond the formal provisions of the articles of association. Companies should ensure that these payments are properly documented and linked to their business activity to secure their tax deductibility.<\/p>\n","protected":false},"excerpt":{"rendered":" The Supreme Court clarifies when directors\u2019 remuneration is tax-deductible, even if the articles of association do not provide for it.<\/p>\n","protected":false},"author":1,"featured_media":3119,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-3441","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en"],"featured_image_src":{"landsacpe":["https:\/\/incofis.com\/wp-content\/uploads\/2025\/03\/Gemini_Generated_Image_fn94bzfn94bzfn94-1140x445.jpg",1140,445,true],"list":["https:\/\/incofis.com\/wp-content\/uploads\/2025\/03\/Gemini_Generated_Image_fn94bzfn94bzfn94-463x348.jpg",463,348,true],"medium":["https:\/\/incofis.com\/wp-content\/uploads\/2025\/03\/Gemini_Generated_Image_fn94bzfn94bzfn94-300x300.jpg",300,300,true],"full":["https:\/\/incofis.com\/wp-content\/uploads\/2025\/03\/Gemini_Generated_Image_fn94bzfn94bzfn94.jpg",2048,2048,false]},"yoast_head":"\n\n
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