‘Paying’ the president

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Q.

I read with interest your last article on payment to presidents and an earlier piece concerning Social Security payments. We are a small Community and pay our president almost €3,000 each year. No receipts for materials, etc are submitted to the AGM. I have long believed this payment should be subject to Spanish income tax and Social Security payments but I have always been overruled at the AGM. I would appreciate your thoughts.

J D (Costa Blanca)


A.

WE have already established that the Community can legally make a payment to the president for his expenses, as long as this payment is properly voted at the AGM. Such a one-time payment needs no withholding tax or Social Security.

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The question now is whether the payment is subject to income tax. In the strictest sense of the law, any payment at all, even lunch vouchers, should be declared. In real life, if the Community accounts were audited, a one-time payment made to the President for his expenses would almost certainly end the matter. Only the most dogged inspector would demand detailed records of the expenses.


Send your questions for David Searl through lawyers Ubeda-Retana & Associates in Fuengirola at [email protected], or call 952 667 090.

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