<\/span><\/h2>\nWhen a professional (lawyer, architect, consultant, doctor…) provides their services through a commercial company in which they are a partner, the Tax Agency requires a minimum correlation between what the company earns and what the partner invoices or receives for their work. This correlation is what is known as the 75% rule<\/strong>: the joint remuneration of all professional partners cannot be less than 75% of the company’s profit before deducting such remuneration.<\/p>\nThis rule stems from Article 18.6 of Law 27\/2014 on Corporate Income Tax, and functions as a “safe harbor”: if met, the taxpayer can consider the partner-company related-party transaction to be valued at market value (arm’s length) without needing to justify anything further during a tax audit.<\/p>\n
<\/span>Requirements for applying the 75% criterion<\/span><\/h2>\nFor the partner’s invoicing to the professional company to qualify under this regime and avoid issues with the Tax Agency, the following conditions must be met simultaneously:<\/p>\n
\nMore than 75% of the company’s revenue<\/strong> must derive from the exercise of professional activities.<\/li>\nThe company must have adequate material and human resources<\/strong> to carry out the activity (it cannot be a mere “shell company” with no real structure).<\/li>\nThe total remuneration paid to all professional partners<\/strong> cannot be less than 75% of the financial year’s profit prior to deducting that remuneration.<\/li>\nThe remuneration of each individual partner<\/strong> must be set based on their actual contribution to the company’s performance, using qualitative and\/or quantitative criteria documented in writing.<\/li>\nThis individual remuneration cannot be less than 1.5 times the average salary of employees performing similar duties, or if there are no comparable employees, 5 times the IPREM (Public Multiple-Effects Income Indicator).<\/li>\n<\/ul>\n<\/span>How to calculate the base to which the 75% is applied<\/span><\/h2>\nThe calculation starts from the company’s accounting profit before deducting professional partners’ remuneration<\/strong>. The minimum percentage is applied to that figure:<\/p>\n\nMinimum partner remuneration = 75% \u00d7 (Profit before professional partners’ remuneration)<\/p>\n<\/blockquote>\n
If the company distributes below that threshold, it is no longer covered by the legal safe harbor, although this does not automatically mean the Tax Agency will issue a tax assessment: it simply loses the presumption that the transaction is at market value.<\/p>\n
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Test 1<\/p>\n
<\/span>Joint partners’ remuneration<\/span><\/h3>\nCompares what all professional partners receive against the company’s profit prior to that remuneration.<\/p>\n
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Accounting profit prior to remuneration (\u20ac)<\/label>Current joint partner remuneration (\u20ac)<\/label>\n
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\u2014<\/div>\n
Minimum required (75%)<\/div>\n<\/div>\n
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\u2014<\/div>\n
Current percentage<\/div>\n<\/div>\n<\/div>\n
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Test 2<\/p>\n
<\/span>Individual minimum per partner<\/span><\/h3>\nEach partner must receive at least 1.5 times the average salary of employees with similar duties, or 5 times the IPREM if none exist.<\/p>\n
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Reference benchmark<\/label>I have comparable employees (1.5x their average salary)<\/option> I do not have comparable employees (5x IPREM)<\/option><\/select><\/div>\nAnnual average benchmark salary (\u20ac)<\/label>\n
Annual remuneration of this partner (\u20ac)<\/label>\n
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\u2014<\/div>\n
Required individual minimum<\/div>\n<\/div>\n
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\u2014<\/div>\n
Difference from minimum<\/div>\n<\/div>\n<\/div>\n
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For guidance purposes only; does not replace advice from a tax advisor. The IPREM is updated annually: check the current figure. Meeting these thresholds grants a presumption of arm’s length value, but does not protect against TEAC criteria regarding “added value” when the company lacks its own resources.<\/p>\n<\/div>\n<\/div>\n
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