According to POL. 1139/2015, the remuneration of members and managers of E.P.E. and I.K.E., as well as the remuneration of representatives of partnerships, is equated with internal remuneration of company directors. These are treated as employment income and taxed in accordance with the provisions of Article 15 of Law 4172/2013. Consequently, the details regarding the deduction of these remunerations from the companies’ gross income are of key importance.
Circular Directive POL. 1113/2015 specifies that remuneration paid to partners for management or representation services is equated with wages and therefore their social security contributions are not deductible from the companies’ gross income. If the partners carry on business activity, their contributions may be deductible from the gross income of their own business.
Furthermore, DAEF 1064780 EX 2015 makes it clear that remuneration received by natural persons who do not carry on any other business activity and which is regarded as income from salaried services is deductible from the gross income of the I.K.E. It is noteworthy that the examination of the nature of the partners’ work must be carried out by the tax authorities, so as to determine the existence of characteristics of dependent employment.
The application of the Digital Transaction Levy to remuneration of managers, as defined by Law 5177/2015, requires attention, as a rate of 1,20% is imposed on remuneration that is deductible from companies’ gross income.
These developments constitute a significant change in the field of taxation of corporate remuneration, and those concerned are called upon to carefully check their procedures so as to ensure compliance with the applicable provisions.
Contact with tax specialists is essential in order for businesses to avoid any fines or penalties for negligent omissions.
