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V0720-14 17 March 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Non-profit associations may apply VAT exemption on services provided to members via statutory fees

A food industry association sought clarification on whether its activities were subject to or exempt from VAT. The DGT ruled that the association acts as a taxable person and that services provided to its members are exempt, provided they are funded exclusively through fees established in its articles of association.

The question raised

Inquiry is made regarding the liability and, where applicable, the exemption of this activity for Value Added Tax purposes.

The DGT's ruling

Non-profit entities that defend the collective interests of their members may apply the exemption provided in Article 20.One.12 of the VAT Law when services are performed to fulfill their corporate purpose and only statutory membership fees are collected. The exemption does not apply if a price independent of the membership fee is invoiced to satisfy the particular interests of the member or if the activity is performed for third parties. The exemption requires that the amounts collected constitute the consideration for services in the collective interest to which all members are entitled equally.

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