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An entity has requested a ruling on whether the free financial aid it intends to provide to self-employed individuals affected by the DANA (extreme weather event) qualifies as a donation. The DGT has ruled that, as the entity is a commercial company without social purposes acting out of mere liberality, these transfers are subject to Inheritance and Gift Tax (ISD).
Companies intending to provide non-repayable aid to disaster victims must account for the tax implications, as such payments are treated as taxable gifts rather than tax-exempt social contributions.
The tax team reviews your specific situation.
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