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V0795-19 15 April 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

Transfer of donations received to fund a championship is not subject to VAT

A sports federation has enquired whether the transfer of funds received via donations to a public entity for the purpose of organising a championship is subject to VAT. The DGT has ruled that there is no VAT liability because the transfer of funds does not constitute consideration for a service.

The question raised

Liability for Value Added Tax on the described transfers of funds.

The DGT's ruling

For a transaction to be subject to VAT, there must exist a legal relationship in which reciprocal benefits are exchanged, with the remuneration being the effective consideration for the service. In this case, the transfer of donations received to finance the championship does not constitute consideration for any operation carried out in favor of the entity transferring the funds. Therefore, the movement of money is a mere transfer of funds without deriving an operation subject to the tax.

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