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Company registered at home: 5 rules on what the company can pay
Step Inside Accounting · Practical guide
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1. You can have the registered office at home
A services company can have its registered office at the partner’s home: that is where it receives post, and that is the address on its invoices and records. The home is still a home.
If the company receives clients, keeps stock or has staff on site, first check the building’s condominium rules and the property’s licence of use.
2. Without a contract, the household bills are not the company’s
The home’s electricity, water, gas and internet are in the partner’s name. An invoice in the partner’s name is not a company expense, even if the company pays it, and the VAT cannot be deducted.
If the company pays those bills, the Tax Authority may treat them as profits distributed to the partner. The exception is services contracted in the company’s name and used for work, such as a phone or an internet line with the company’s tax number (NIF).
3. Renting a room to the company
The way for the company to bear part of the home is for the partner to rent it a room, such as the office. For that you need:
- A written contract, registered with the Tax Authority, with a market-value rent.
- Stamp Duty of 10% of one month’s rent, paid by the partner when registering the contract.
- Rent receipts issued by the partner on the Portal das Finanças.
The company withholds 25% income tax (IRS) on each rent payment, unless the partner opts for the exemption (rents up to €15,000 a year) and states it on the receipt. The partner declares the rent in their IRS return, where it pays 28% or can be added to their other income. For the company, the rent is an expense.
4. Run the numbers before renting
The rent reduces the company’s corporate tax (IRC), but it pays IRS for the partner, and the IRS rate is usually higher than the IRC rate. Often the rental costs more tax than it saves.
Example
The partner rents the home office to the company for €200 a month. The company deducts €2,400 a year and saves €360 of IRC (15%). The partner pays €672 of IRS (28%), plus €20 of Stamp Duty at the start of the contract. In total, the company and the partner pay €332 more tax in the first year.
The rental can pay off when the partner has a low income and adds the rent to their other income for IRS, or when the company pays a higher IRC rate.
5. Remote work and other things to watch
Remote-work allowances, up to €1 a day free of IRS and Social Security, are for employees with a remote-work agreement. A managing partner without an employment contract generally cannot receive them.
Before renting part of your home, also think about the home itself. The rented room stops being your own permanent residence, which can affect property tax (IMI) benefits or, when you sell the home, capital gains.
Team tip
Before asking the company to pay household costs, talk to us. For many companies, the best solution is to put in the company’s name only what is really for work, such as the phone, mobile internet and equipment, and keep the home out of the company.
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This article is for information only and does not replace professional advice. Figures and rules are those in force at the date of publication and may change.
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