By Marta Soto-Yarritu
With the reform of the LSC operated by Legislation 31/2014, they had been modified (i) the art. 217 LSC, which introduces the reference to directors “of their capability as such” and (ii) the art. 249 LSC, which establishes the necessity to enter right into a contract between the corporate and the manager director, which should be accredited by the Board of Administrators with the favorable vote of two-thirds of its members.
In accordance with interpretation of the Supreme Court docket (judgment of February 26, 2018), the art. 217 LSC it’s utilized to the remuneration of administrators, with out making a distinction between non-executive and government (in unlisted firms). Due to this fact, the remuneration they obtain for his or her government capabilities (i) should be regulated within the bylaws and (ii) is topic to the utmost annual quantity accredited by the assembly, each extremes referred to within the aforementioned artwork. 217 LSC. The appliance of art. 217 LSC Y 249 LSC – which accommodates the specialties that apply to the CEO or government director – is cumulative (The principles contained in each precepts). Though it clarifies that the precept of statutory reserve should be interpreted with some flexibility, attributable to the truth that the board has competence to agree on the distribution of remuneration among the many administrators and to signal the contract with the CEO.
Though it’s a single judgment of the Supreme Court docket and, due to this fact, doesn’t represent jurisprudence, it has generated uncertainty. Specifically, it has raised doubts about (i) the legality of the remuneration charged by government administrators and (ii) concerning the consideration of it by the tax administration as a deductible expense for the corporate.
Legality of the remuneration collected
Within the first place, it should be taken under consideration that the aforementioned judgment of the Supreme Court docket refers back to the registration of a selected statutory clause of an SL (which, by the way, had a singular wording: “The place of administrator is not going to be remunerated, with out prejudice to the truth that, if there’s a board, the latter agrees, the remuneration deemed handy to the manager administrators for the train of the manager capabilities entrusted to them, with out a assembly settlement or the necessity for precision. statutory statute of higher precision of the remuneration idea or ideas, all in utility of what’s established in article 249.2 of the Capital Firms Legislation“). Due to this fact, the ruling doesn’t analyze the legality of the remuneration paid to the administrators.
The issue concerning the legality of the remuneration obtained arises within the framework of the attainable declare of the corporate (or considered one of its companions) for which the director is required to return the remuneration obtained, as these are usually not duly mirrored within the bylaws. On this space, it’s clear from the jurisprudence of the Civil Chamber of the Supreme Court docket that the refusal to cancel the remuneration obtained when, regardless of not being included within the statutes, had been consented to by the companions primarily based on the abuse of ritual:
“The aim of the authorized system of remuneration of directors, which requires the statutory fidelity of the remuneration system, isn’t pissed off when the compensation has been unanimously set by the companions, amongst whom the administrator in query held a small stake within the capital inventory, in an settlement that has not been challenged. The separation that the corporate now seeks with respect to the unanimous settlement adopted by the companions to indemnify the administrator within the occasion of termination seems in addition to an abuse of ritual that can not be accepted ”(Sentence of the Plenary of the Supreme Court 646/2018, of November 20, 2018).
Donations and donations are thought-about non-deductible bills (art. 15 LIS). This was the argument historically utilized by the Tax Administration to reject the deductibility of the remuneration paid to directors or administrators for capabilities or actions of route or administration of the corporate (supplied inside the framework of an employment relationship or a service contract) , when the statutes established the gratuity of the place, on the premise of what’s referred to as the “bond principle” or the “unitary therapy” (which supposes that the business bond subsumes and absorbs another labor or contractual bond). The Legislation 27/2014 amended the Company Tax Legislation and launched a subsection in his art. 15 e) establishing that donations or donations are usually not thought-about “the remuneration to directors for the efficiency of senior administration capabilities and others derived from a labor contract with the entity “. With this, plainly the legislator wished to make clear that the remuneration of the directors must be a deductible expense for the corporate, no matter compliance with the authorized guidelines regarding statutory fidelity and their registrability within the Mercantile Registry.
Nevertheless, regardless of the modification of the LIS, plainly the Tax Company continued to insist on denying the deductibility of the administrators’ remuneration within the occasion of an absence of statutory regulation, primarily based on the provisions of the art. 15 f) LIS which offers for the non-deductibility of tax “The bills of actions opposite to the authorized system”. On this sense, the TEAC decision of July 17, 2020, referring to the reform, says:
“With what the actually novel inclusion of the principle is the one which excludes that the remunerations that concern us might be thought-about liberalities. Point out with which it might be thought that the norm attributes to them the character of deductible in any case and with out another consideration. Nevertheless, this isn’t the conclusion reached by this Central Court docket, as a result of the principle solely says what it says: that the remuneration to directors for the efficiency of senior administration capabilities is not going to be understood as included among the many advantages, and, with it, that the deductibility of such bills can’t be denied in accordance with the provisions of that letter e). However this should essentially be built-in with the truth that tax laws have by no means allowed the tax deductibility of bills that violate the authorized system as a complete. […]” concluding that the tax deductibility of the administrators’ remuneration inexcusably requires compliance with the business laws pertaining to the matter “.
This identical criterion was additionally included within the TEAC decision of October 8, 2019.
Given the interpretation of the tax administration, it’s value contemplating what the which means of the regulation expressly excludes the remuneration of administrators from the class of non-deductible bills included in part e) of artwork. 15 LIS, to incorporate them within the class of part f) under. That’s, it doesn’t appear to make sense to waive a particular rule to use a common one. What sense would the reform articulated by means of Legislation 27/2014 have in such a case? For many of the doctrine, stated reform (along with the reform of the LSC by Legislation 31/2014) was aimed toward deactivating the doctrine of the bond in the fiscal and commercial spheres (as identified, amongst others, by Segismundo Álvarez Royo-Villanova, The remuneration of directors and the TEAC Decision of July 17, 2020, La Ley Newspaper, No. 9780, Doctrine Part, January 28, 2021).
Lastly, and above all, it should be remembered that in latest judgment of the Supreme Court of February 8, 2021 – though it offers with one other matter – the TS says:
“The thought behind the expression “actions opposite to the authorized system” must be restricted, Expansive interpretations must be averted, since this expression refers solely to sure sorts of actions, eg. bribery and different related conduct.”
This conclusion might be extrapolated to the case of the remuneration of government administrators to defend their deductibility; In different phrases, failure to adjust to business laws concerning the remuneration of government administrators can not routinely be equated to an motion opposite to the authorized system, with which the Supreme Court docket would have disavowed each the TEAC and all those that respect any impact of the Judgment of February 26, 2018 on the validity of the statutory clauses of remuneration of registered directors (keep in mind that solely a sentence can annul them by utility of article 20 C of c) or on the validity of the remuneration obtained by government directors underneath of the identical and of their contracts with the corporate.