Press release

Remuneration of Directors: Review of the applicable regime according to the form of government adopted

26/04/2016

Pérez-Llorca organised a seminar on the commercial, labour and tax regime of the remuneration of directors. The session had a predominately practical focus and individually reviewed each of the different forms of government provided for by Spanish legislation. The speakers at the seminar were Francisco León, Of Counsel of Pérez-Llorca and Professor of Commercial Law at Universidad de Huelva; Daniel Cifuentes, Partner of the Labour department at Pérez-Llorca; and, Victoria von Richetti, senior lawyer at the Tax department of Pérez-Llorca.

Francisco León Sanz spoke about the most important changes brought about by the reform of the Corporate Enterprises Act, by way of Law 3/2014 of 3 December, regarding the appointment and remuneration of managers and directors. In this respect, he brought together various lines of interpretation which, in the year since the reform came into effect, have had far-reaching consequences for companies. In his talk, he elaborated on each of the examined scenarios, the applicable legal sources, and explained which would be the competent bodies to approve remuneration and establish the appropriate formalities and procedure.

Next, Daniel Cifuentes focused his talk on evaluating the characteristics of different kinds of administrative bodies. In this sense, he analysed the circumstances in which the relationships between the managers and members of government bodies could warrant being defined as employment relationships, and when said relationships should be considered business relationships. In this respect, he reflected on the ‘contractual relations theory’ and evaluated its relevance with regards to the reform of the Corporate Enterprises Act. Additionally, Daniel Cifuentes explained which Social Security inclusion regimes would be applicable for each of the government forms examined.

Lastly, Victoria von Richetti Cirujeda evaluated the consequences of appointing directors and senior management from a tax perspective. In particular, she highlighted that the remuneration conditions for the appointment of directors and senior management should be considered as a tax-deductible expense with regard to Corporate Taxes. Furthermore, she evaluated which retention system would be appropriate for these circumstances with regards to calculating Personal Income Tax. Lastly, she highlighted that these remunerations have caused uncertainty regarding Value-Added Tax when received directly by the natural person.

Throughout the seminar, the attendees asked various questions and took part in an animated debate.

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