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V0617-15 19 February 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · cooperativa especialmente protegida

Sales to another cooperative via inter-cooperative agreements do not count towards the non-member third-party limit

An agricultural cooperative has enquired whether it loses its tax-protected status if it sells more than 50% of its production to another cooperative through an inter-cooperative agreement. The Directorate General for Taxes (DGT) has ruled that such sales are treated as transactions with members and therefore do not count towards the limit for third-party operations.

The question raised

Question posed: Whether the consulting entity meets the requirements to enjoy the status of a fiscally protected cooperative and to make the adjustments in Corporate Income Tax relating to the Education and Promotion Fund and the Mandatory Reserve Fund, as well as the reduction in the tax liability.

The DGT's ruling

Sales made to another cooperative under an inter-cooperative agreement, pursuant to the regulations of the Region of Murcia, are considered to have the same status as transactions with members. Therefore, they do not count towards the 50% limit on transactions with non-member third parties provided for in Law 20/1990. If the other requirements of Law 20/1990 are met, the entity may be considered specially protected and enjoy incentives such as the reduction in the Corporate Income Tax liability.

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