Incentives tied to a liquidity event are now standard in groups with institutional investors, and increasingly common in family groups preparing an exit. Their tax treatment involves a split worth anticipating: the expense is booked over several years and only becomes deductible at the end. Binding ruling V0812-26, issued on 13 April 2026 by the Dirección General de Tributos (the Spanish tax authority's directorate that issues binding rulings), sets out the position.
The facts considered
A group taxed under the consolidation regime approves a long-term incentive plan for the management teams of several of its companies, including executive directors. The incentive is linked to the increase in the parent company's net equity and will be settled in cash when the shareholders transfer their holding and this brings about a change of control in favour of a third party.
The plan is discretionary, extraordinary and non-consolidable. As regards beneficiaries who also sit on the board, the companies state that they have met the requirements of the Spanish Companies Act for the incentive to be binding on the company itself.
The question is whether the related staff expense will be deductible in the year the plan is settled.
The accounting treatment
Since the incentive is referenced to the value of the parent's equity instruments and is settled in cash, recognition and measurement rule 17 of the Spanish General Accounting Plan applies, governing share-based payment transactions, in line with query 2 of BOICAC 143, of September 2025.
The company recognises the services received as an expense and, as the corresponding entry, a liability, specifically a provision, at fair value on the recognition date. That liability is subsequently remeasured at fair value at each year end, with changes taken to profit and loss.
Accrual does not wait for payment. The expense must be recorded in the year the rights and obligations arise, at the best estimate of the amount payable, and spread over the service period. Where the company has failed to account for it correctly, recognition and measurement rule 22, on changes in accounting policies, errors and estimates, applies.
The tax rule that defers the deduction
This is where the split occurs. Article 14.3.e) of Act 27/2014 treats as non-deductible those expenses associated with staff provisions corresponding to share-based payments used as a form of employee remuneration and settled in cash.
Paragraph 5 of the same article completes the rule: expenses that were not deductible are brought into the tax base of the period in which the provision is applied or the expense is allocated to its purpose.
The result is a positive off-book adjustment while the provision builds up, reversing in the year the plan is settled, which is when the expense produces its tax effect.
Executive directors
As regards beneficiaries who also sit on the board, the ruling accepts deductibility to the extent that the incentive constitutes onerous remuneration linked to the performance of their duties, including management or executive functions, and provided the conditions of accounting recognition, accrual-based allocation and documentary support are met.
The tax authority relies on the Spanish Supreme Court judgment of 13 March 2024, cassation appeal 9078/2022, under which the so-called linkage theory cannot be applied for tax purposes with the scope claimed by the administration, and payments made to directors, being onerous, evidenced and recorded, are to be treated as deductible without their absence from the articles of association turning them, by itself, into a gift.
What the ruling cannot settle
The reply carries a significant caveat. From the facts supplied it cannot be established whether the whole staff expense was allocated across the service period on an accruals basis, and the tax authority is not competent, under article 88 of the General Tax Act, to analyse or assess the taxpayer's accounting entries.
In other words, the ruling confirms the applicable regime but does not validate the accounts of the company that asked.
Practical implications and conclusion
That is where these plans most often fail. They tend to be documented rigorously as a matter of company law and neglected in accounting terms over the years leading up to the liquidity event, so that when it arrives there is no trace of the periodic charge. The issue then ceases to be one of timing and becomes the correction of an accounting error.
The plan should therefore be treated from the first year end for what it is: an estimated liability to be measured each year, revisited whenever expectations about the sale change, and documented with the same care as the resolution that created it. The deduction comes at the end, but the support for it is built from the outset.
Lex·on advises on corporate taxation, executive remuneration and transaction readiness from Palma de Mallorca and Manacor. If your group has or is planning an incentive scheme tied to a sale, we can review how it fits in accounting and tax terms.
Source: Binding ruling V0812-26 of 13 April 2026, Spanish Directorate General for Taxation, Sub-Directorate for Corporate Income Tax.
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This article is for information purposes only and reflects the administrative position in force on the date of publication. It does not constitute legal or tax advice and does not replace an individual analysis of each case.