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A non-profit foundation has requested clarification on whether it must apply a 2% withholding tax to study grants intended for a training and job placement project. The Directorate General for Taxes (DGT) has ruled that, as the grants do not meet the requirements for tax exemption, they are classified as employment income and subject to withholding tax.
This ruling clarifies the tax treatment for non-exempt vocational training grants, confirming they must be treated as employment income subject to withholding, which affects the administrative obligations of non-profit entities providing such aid.
The tax team reviews your specific situation.
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