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V0248-22 11 February 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad sin ánimo de lucro

Income from economic activities in non-profit entities taxed at 25%

A non-profit sports association inquired whether its advertising service profits are taxed at 10% or 25%. The DGT ruled that, as it is not a public utility entity, its income from economic activities is subject to the general rate of 25%.

The question raised

Whether the profits obtained from said business activity must be taxed at the 25% tax rate or at a lower tax rate, such as 10%, given that it is a non-profit entity and declared as a private entity of local public interest.

The DGT's ruling

Non-profit entities not included in Law 49/2002 are partially exempt under the regime of Chapter XIV of the LIS. However, the exemption does not extend to income from economic activities pursuant to article 110 of the LIS. If the entity carries out an economic activity, its income and the donations or fees intended to finance it shall be subject to tax and not exempt. The applicable tax rate for such income shall be 25% in accordance with article 29.1 of the LIS.

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