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V0054-25 3 February 2025 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad parcialmente exenta

Income from economic activities in non-profit associations is subject to Corporate Income Tax

A non-profit association inquires whether the income from its environmental workshops is exempt from Corporate Income Tax. The DGT responds that, if the workshops constitute an economic activity, the income shall be subject to tax and not exempt.

The question raised

Question posed Regarding Corporate Income Tax, considering that the applicant is subject to Law 49/2002 and therefore is registered as a partially exempt entity for tax purposes, as well as that its income has not exceeded €75,000 in the two years prior to the submission of the inquiry and for that reason it has not filed a tax return for either of the two fiscal years, is it correct to understand that the invoiced income would be exempt from Corporate Income Tax as it is included within the object of the non-profit applicant.

The DGT's ruling

The income of a non-profit entity is exempt only if it arises from its specific object or purpose and does not derive from an economic activity. If the provision of services involves the organization of production means and human resources to distribute goods or services, it is considered an economic activity and its yields shall be subject to tax. In this case, the environmental workshops appear to constitute an economic activity, therefore their income and the subsidies to finance them shall be subject to the tax.

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