Will be taxed on personal income tax, not as a company, on 2013 earnings

Will be taxed on personal income tax, not as a company, on 2013 earnings

In 2013, young Rubén Doblas was the king of YouTube in Spain. A few years after he was interrupted on the social network with his videos focusing on the world of video games, ruby it happened first spanish youtuber Reaching one million subscribers on his channel, he has since held the throne, which is now more than 40 million.

Low taxes make Andorra a 'youtuber' paradise

Low taxes make Andorra a ‘youtuber’ paradise

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Almost a decade later, the Madrid courts settled with the Treasury, confirming that the company that El Rubius was running at the time had inadvertently taxed its 2013 income through taxation. Corporation tax, at lower rates and below market values, while actually having to pay them personally as personal income tax. “The proceeds were subject to Personal Income Tax (…) and not Corporate Tax, and the resulting amount must be attributed to the individual partner to pay Personal Income Tax”, although this decision, which is not yet final, appealed, as far as possible, to the Supreme Court. the company itself reported that he has already paid Absence of a decision on the appeal against the decision of the Economic Administrative Court of Madrid.

The treasury inspection began in 2015 and looked through a magnifying glass at 2013, when El Rubius’ career began, reaching one million subscribers and billing his benefits through his then-owned company, Snofokk SL. 98% and since 2015 managed by a third party. That’s why long before moving to Andorra, a much more charitable country where its residents have tax obligations, like other youtubers, they have grown their subscriber base to more than 40 million people on YouTube, earning more than a million euros a year.

That year, 2013, the company owned by El Rubius made a net total of just over 230,000 euros from YouTuber’s videos, promotions or participation in events. In return, the company Snofokk SL paid El Rubius approximately 99,000 Euros for the provision of its services. The company had neither employees nor financial means, only the figure of El Rubius and the contracts they signed to attend events, videos and promotions.

The treasury inspection concluded that the comparison between the price charged by the company to other companies for the services of El Rubius was significantly higher than the price that the youtuber subsequently charged, and was only relevant to his activity. the owner mistakenly paid Corporate Tax and personally paid it Personal Income Tax (personal income tax). According to the Treasury, the price of the operation between the company and its manager “does not match normal market value”, as the revenue collected by Snofokk SL for El Rubius’ interventions is “much higher than it pays”. youtuber, although they have the same concept: their videos and participation in events or advertising campaigns.

This means that according to the Treasury and the courts that year, El Rubius company inadvertently paid Corporate Tax and also underestimated its income well below the market value it had determined in its deals with third parties. Having no workers or financial means, the company “did not provide any relevant added value” and it is not illegal to charge through a company, but valuing its own services below market price meant paying less tax. “This is intended to avoid the imposition of progressive and higher tax rates of Personal Income Tax compared to Corporate Tax,” says Justice.

As learned, the case chamber of the Madrid High Court of Justice decided to reject the appeal of the company, which was then owned by El Rubius, and to approve the liquidation by the Treasury for 2013: Snofokk SL actually paid about 197,000 euros, deducted costs. about 99,000 Euros to youtuber for services worth paying according to personal income tax rates. A total quota of 14,700 Euros and an interest of approximately 1,300 Euros were returned to the company.

A youtuber’s “very personal event”

Since the start of Rubén Doblas’s economically viable youtuber career in 2013, his channel’s subscriber volume has increased 40 times, he has turned some of his activity to the Twitch platform and his revenue has increased. The company Snofokk SL itself announced, for example, that in 2020 it will bill 2.6 million euros, save more than 250,000 euros in profit and spend more than 100,000 on staff with two workers.

More than a decade ago the situation was different and Spain’s largest youtuber was working through a society without workers and with no financial means other than the intellectual property rights of his computers, cameras, headphones and videos. These circumstances make this decision of the Madrid Supreme Court an interesting discussion about the economy revolving around YouTube, where a camera and a YouTuber might be enough to get started.

This is what the El Rubius company claimed failed in its appeal. It is possible in an ecosystem where until 2013 youtuber did not monetize his presence on this platform and his economic rise is not necessary thanks to the emergence of the limited liability company and the partner responsible for receiving the contracts. The infrastructure of a television channel that will produce content reaching millions of people.

Neither the Treasury nor the Madrid High Court of Justice accepted this claim. At the time, according to the verdict, the company Snofokk SL did not “provide any relevant added value” to what moves the money: the El Rubius figure is neither in its videos nor in a promotional act paid for by a third party. It’s a “very personal activity” that the community can’t provide on its own without relying on the Youtuber.

The company entered more than 230,000 Euros and paid the youtuber 99,000 Euros. The Treasury cuts expenditures of 33,000 euros and concludes that in reality El Rubius’ services are worth about 197,000 euros, which translates into tax savings of about 16,000 euros that year. In a decision that the youtuber can still bring before the Supreme Court and it, the Madrid Supreme Court explains, “The work was carried out exclusively by him, the reasons why the proceeds obtained are subject to personal income tax and not Corporate Tax.” third room.

Treasure and youtubers

Some Spanish youtubers with the most subscribers have made headlines in recent years, but not because of their videos or comments, but because of their relationship with the Spanish Treasure. Some, like Willyrex, Vegetta, The Grefg, or El Rubius, left Spain and settled in Andorra, where taxation with these influencers was much more lavish. “I have literally spent ten years of my YouTube career here paying off. I know there will be critics who will criticize me, but most of the time people speak unknowingly. I know this will happen and I’m not worried,” Rubén Doblas said when he announced his intention to move.

While Andorran authorities apply a single 10% on all income, personal income tax in Spain is staggered and those earning more than 300,000 euros per year pay 47% of this tax, the maximum rate. Living in Andorra for at least 183 days per year is sufficient to be considered a tax resident in that country.

#taxed #personal #income #tax #company #earnings

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