The binding tax ruling V0203-25 by the Spanish Directorate General for Taxation (Dirección General de Tributos, DGT) provides important clarity, particularly relevant to property rental companies facing generational or workforce changes involving family members. The determining factor for the exemption isn't the Social Security registration system itself, but rather the existence of a genuine employment relationship.
In this article, we thoroughly examine a key issue that may initially seem technical but carries significant wealth-related tax implications.
When an employee responsible for property management retires, finding a replacement becomes necessary. In this scenario, the appointed individual—the spouse of the company's administrator—is required to register under the Special Regime for Self-Employed Workers (RETA).
This raises an immediate concern: Does mandatory affiliation to RETA jeopardize the eligibility for wealth tax exemption for company shares?
The response, fortunately, is reassuring.
Real employment relationship versus classification formal
According to the DGT's clear stance in binding ruling V0203-25 (dated February 19), the essential criterion isn't the formal label of the employment regime (such as RETA), but rather the existence of a real employment relationship characterized by dependency, remuneration, and third-party interests.
Therefore, even though labor law mandates affiliation as self-employed, this alone does not prevent compliance with the requirement outlined in Article 27.2 of the Personal Income Tax Law (Ley del IRPF), thus classifying property rental management as a genuine economic activity.
Recommendations in case of tax inspections
To mitigate risks during a tax inspection, companies should proactively document the genuine existence of the employment relationship thoroughly. Recommended documentation includes:
Detailed employment or service provision contracts.
Complete records of working hours.
Clear payment evidence via payroll or invoicing.
Certificates confirming RETA contributions.
Detailed organizational charts showing the employee's integration within the company.
Clear proof of employment subordination (instructions, emails, regular reports, etc.).
