Supreme Court allows companies to deduct directors’ salaries

The Supreme Court, contrary to the criterion followed until now by the Tax Agency, allows companies to deduct the remuneration of directors from Corporation Tax, even if the company’s own articles of association do not provide for the remunerated nature of the position.

The High Court thus upholds the company against the ruling of the National High Court, which denied the deduction from corporate income tax of the salaries paid to the three directors of the company who combined their employment relationship with their position as members of the board of directors.

Finally, they point out that this recent Supreme Court ruling opens the door for all those companies that did not deduct these salaries out of prudence to now initiate proceedings to recover the excess tax paid.

If you have any doubts regarding this issue, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.