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V0857-23 12 April 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario o profesional

Donations and subsidies for a foundation's general activities are IVA-exempt

A foundation asked whether income from donations, contributions and subsidies was subject to VAT and whether it had to register as a business. The DGT replied that such income, if funding general activities and not constituting a service in return, is not subject to VAT.

The question raised

Whether the income from donations, private contributions, and grants received by the requesting Foundation is subject to Value Added Tax and whether there is an obligation to register as an entrepreneur or professional for the purposes of this Tax.

The DGT's ruling

Donations, contributions, and grants intended to finance the general activity of the foundation do not constitute consideration for the delivery of goods or services. If the foundation only carries out gratuitous operations or operations with merely symbolic consideration, it does not hold the status of entrepreneur or professional for VAT purposes. However, if it carries out onerous deliveries, these shall be subject to the tax and it must comply with the registration and declaration obligations.

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