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V0874-22 25 April 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · explotación económica complementaria

Restaurant income for a foundation may be exempt from Corporation Tax if it is a complementary activity

A foundation providing hospitality courses has enquired whether operating a restaurant for student training constitutes an exempt complementary activity. The DGT indicates that it could be exempt from Corporation Tax subject to certain limits, though it will be subject to 10% VAT.

The question raised

1. Whether the catering activity, under the terms set forth, may be considered a complementary activity to training for the purposes of Article 7.11 of Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage, and Article 24.1 of Law 50/2002, of December 26, on foundations.

The DGT's ruling

In Corporate Income Tax, catering activities may be exempt if they are merely auxiliary or complementary and do not exceed 20% of total income, or if they are of minor relevance (less than 20,000 euros). Regarding VAT, catering is an independent service from training and shall be taxed at 10%. With respect to the IAE, the entity is subject to the tax for teaching and catering services.

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