{"id":14567,"date":"2025-09-12T16:15:58","date_gmt":"2025-09-12T16:15:58","guid":{"rendered":"https:\/\/vila.es\/?p=14567"},"modified":"2025-09-17T07:11:49","modified_gmt":"2025-09-17T07:11:49","slug":"remuneration-of-company-directors-not-approved-by-the-general-meeting","status":"publish","type":"post","link":"https:\/\/vila.es\/en\/corporate\/remuneration-of-company-directors-not-approved-by-the-general-meeting\/","title":{"rendered":"REMUNERATION OF COMPANY DIRECTORS NOT APPROVED BY THE GENERAL MEETING"},"content":{"rendered":"

ES<\/a><\/span>|EN|\u65e5\u672c\u8a9e<\/span><\/a><\/strong><\/p>\n

The recent judgment of the National High Court 2025\/5872428 given on 8th<\/sup> May 2025 regarding the challenge to the ruling by the Central Economic Administrative Court\u00a0(Tribunal Econ\u00f3mico-Administrativo Central) hereinafter \u201cCEAC\u201d, of 11th<\/sup> June 2020, regarding claim 2782\/2018), clarifies the court\u2019s position on the deductibility of the remuneration of company directors for corporate income tax purposes, when said retribution has not been formally approved by the General Shareholders\u2019 Meeting.<\/p>\n

The analysed case refers to the 2011 to 2014 fiscal years and focuses on two main issues:<\/p>\n

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  1. The deductibility of the payments made to the members of the Board of Directors and the Managing Director of the company.<\/li>\n<\/ol>\n
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    1. The deduction on investments in cinema carried out by the Economic Interest Group (Agrupaci\u00f3n de Inter\u00e9s Econ\u00f3mico) hereinafter \u201cEIG\u201d).<\/li>\n<\/ol>\n

      Case background<\/u><\/p>\n

      In the case at hand, the appellant company challenged before the National High Court the ruling by the TEAC, which had partially upheld its claim against the Spanish Tax Agency\u2019s assessment triggered by a notice of disagreement.<\/p>\n

      The tax regularisation affected two concepts:<\/p>\n

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      1. Remuneration of company directors<\/u>: the deductibility of payments made to the company directors, understood as the remuneration of the Chairman of the Board of Directors-Managing Director was denied because they did not fulfil the conditions for approval required by commercial legislation (provisions regarding approval by the General Meeting).<\/li>\n<\/ol>\n
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        1. The deduction on investments in cinema<\/u>: The deductibility of contributions made to the EIG \u201cClash of the Titans<\/em>\u201d was refused as the Inspectorate perceived that the EIG did not have the status of a film producer.<\/li>\n<\/ol>\n

          The National High Court addressed both matters, clarifying the applicable legal and case law requirements.<\/p>\n

          Remuneration of directors<\/u><\/strong>:<\/p>\n

          The CEAC had differentiated between executive functions (production direction, sales, financial and administration support) and strictly corporate functions such as that of being a member of the Board of Directors. It only considered the remuneration of directors to be those amounts linked to the latter, and therefore allowed a partial deduction.<\/p>\n

          Nevertheless, the National High Court emphasised that:<\/p>\n