|
|
| FP6 Financial Info & FAQs --> Project --> Costs --> Staff Costs --> Staff Costs FAQs |
 |
|
Q: | A person from the small member company, who participates in the project is a part owner of the company, and is not an employee. He draws all his income from the company as a “distribution of profit”. However, this profit is in fact his salary and can be traced in the books of the company, that the money received from the project is paid out to the person (after paying all necessary taxes), and not at all profit for other people. Is this cost eligible as personnel cost? As I understand, here, the costs are eligible according to 2.1.2.4 of the "Guide to Financial Issues”, and are not considered as receipts. |
|
|
A: | Section 2.1.2.4 relates to premiums on loan guarantees – we think the reference should be to 2.1.2.3. and/or 6.1.1. We assume that this is a corporation (registered company with or without limited liability) which is capable of and in the past has paid salary to the “owner” in question. Effectively he receives his compensation as salary and dividend (presumably to save Income Tax or National Insurance (Social Security)). For all that, and even within the definition as detailed in the question, the dividend is part of the company’s profits. The EU will not finance profits and, unless very exceptionally circumstances can be proved to the external auditors who report on the results in form C, and to the Project Officer, the dividends are not an eligible cost. |
|
|
|
Home