Can a company deduct self-employed expenses?

The  clarifies if the autonomous contributions in a company are deductible


The General Directorate of Taxes issues a binding query that clarifies the issue.

The administrators of a company have to pay Social Security fees. There is a possibility that it is the society itself that pays these amounts. In this case, can the administrator’s fee for self-employed workers be deducted? How to proceed?

The Treasury clarifies it following a binding consultation of the Directorate General of Taxes, belonging to the Tax Agency, which refers to whether it is possible to deduct this expense by declaring it in model 190 as compensation in kind from the administrator.

Treasury has recalled that the payment of the corresponding fees by the company will result in a higher salary. This occurs in the Special Regime for the Social Security of Self-Employed or Autonomous Workers (RETA), in which those who carry out the management and management functions that entail the performance of the position of administrator or director, when the obligation of to quote the latter.

In other words, the RETA shares, paid by the mercantile society to its administrator, will be considered as remuneration of work in kind, which means the obligation to make an income on account, income that will add to the value of the income in kind, unless the amount has been passed on to the recipient of the rent.

On the other hand, if the payment was made by delivering its monetary amount to the administrator, its rating would be that of monetary remuneration, so that the payment on account (withholding) would be deducted from that amount.

In any case, it will be considered a deductible expense for the determination of the net income from work, in accordance with the provisions of article 19.2.a) of the LIRPF, which considers Social Security contributions or mandatory general mutuals of civil servants as such.



Source: Cinco Días, March 27, 2019