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V0990-20 21 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · actividad empresarial

Legal functions of a Regulatory Council are VAT-exempt, but commercial activities are taxable

A Regulatory Council for a Protected Geographical Indication queries whether its income from fees and services is exempt from VAT. The DGT responds that statutory functions are not commercial activities and thus are not subject to VAT, but other activities competing with private market activities are subject to the tax.

The question raised

Application to the requesting Regulatory Council of the exemption provided in Article 20.One.12 of the Value Added Tax Law.

The DGT's ruling

The actions of Regulatory Councils in the performance of their legal functions are not considered business activities and are therefore not subject to VAT. However, activities carried out in competition with private agents and without public interest are considered subject to the tax. In the event of performing both taxable and non-taxable activities, the deduction regime for dual entities and the pro rata rule must be applied.

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