BackIn recent years, the procedures for verifying relations between partners and their companies have had an impact on various professionals, such as actors, sportsmen, broadcasters, doctors, lawyers, etc… Now, these checks are being extended to companies which, by providing services to third parties, have greater human and material resources.
In the case analyzed, the Tax Inspectorate considered that the provision of services by the partner and administrator to the company constituted a related-party transaction. With this classification, it attributed to the partner all the added value generated by the company, ignoring the goodwill associated with the human and material resources used in the activity.
The National High Court, however, rejected the idea that it was a professional partnership based exclusively on the qualities of the sole partner providing the services. It argued that securities agency activity, by its nature, does not have a very personal nature (intuitu personae). Furthermore, it recalled that the Spanish Tax Authorities had recognized, due to binding consultation V2862-17 of November 6th, 2017, that this activity constituted a branch of activity.
It also dismissed the comparison between the remuneration of the administrator and sole shareholder and that of young employees, stressing that they are not comparable situations. Although these employees have the necessary qualifications, their relationship with the company is limited, as they operate under an employment relationship.
Therefore, the National High Court annulled both the regularization carried out and the resolution of the Central Economic-Administrative Court (TEAC).
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