Company directors’ remuneration: legislative changes

The Spanish Corporate Income Tax Act 27/2014 of 27 November now lays down that the remuneration of directors for the performance of senior management functions, or other functions under an employment contract with the entity, shall not be regarded as ex gratia payments (art. 15(3)(e), last sentence). This will mean a degree of relaxation on the part of operators as regards compliance with company regulations, since the true incentive rested on tax deductibility. Even so, we should proceed with caution, as the foregoing does not rule out a priori any tax contingency and, in many cases, one will not be able to assert that a director performs senior management functions or that he/she is in the employ of the company…