On 26th February 2018, the Spanish Supreme Court pronounced a relevant judgment regarding unlisted entities in the sense that the remuneration of directors “as such“ comprehends both deliberative and executive functions (as in the case of Chief Executive Officers).
In this context, the remuneration system as well as the remuneration amounts must not only be established in the Company’s Act, but also must the yearly ceilings set by the Board complied with.
Thus, remuneration amounts paid to the Directors shall only be deductible with regard to Corporate Income Tax, if both conditions are given.