The Supreme Court dealt with OÜ management, i.e. the services and fees provided to the company by OÜ members of the board as an employment relationship and salary. Decision (3-3-1-25-15) was made on 11 September. This is the first OÜ formation case with a final decision, in which the court gave the right to the Tax and Customs Board (MTA).
The Supreme Court came to the conclusion that the tax authority has the right to consider the service provision agreement between the company and the management board member's limited partnership as either a board member's contract or an employment contract. The tax authority has the corresponding right if the tax authority finds and proves that the service provision agreement between the company and the private limited company is sham, i.e. the company actually had an employment contract with a member of the management board or a member of the management team.
Whether a transaction is apparent depends on the circumstances of the particular case. For example, if the actual place of work of a member of the management board is at the headquarters of the company, this confirms that it is not a service contract, but a hidden board member or employment contract. It is also important whether the content of the services provided by the OÜ is the same that the board member or employee performed or performs on the basis of the board member or the employment contract.
The latter means that if invoices for service fees have moved between companies, labor taxes will now be added to the recipient or payer of the invoice. In the decision of the Supreme Court (3-2-1-82-14), the court explained that if it is really an employment relationship, the service fee received in the OÜ account can be withdrawn tax-free by the partner. It can be concluded that in such a case billers could use this to their advantage because gross income becomes net income.
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