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V1092-21 26 April 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad parcialmente exenta

Income of non-profit sports associations may be exempt from Corporation Tax and VAT depending on its nature

A beach handball association has requested a ruling regarding the exemption of its income from Corporation Tax, VAT, and the Business Activities Tax (IAE). The DGT has determined that Corporation Tax exemption depends on the income not arising from an economic activity, while VAT exemption depends on whether the services are sporting activities provided by a social entity.

The question raised

1) Whether the income obtained could be considered exempt by application of the provisions of Article 110 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

In Corporate Income Tax, income is exempt if it arises from the corporate purpose and does not constitute an economic activity. In VAT, sports services provided to natural persons are exempt if provided by an entity of a social nature. Sponsorship contributions are not subject to VAT if they fall within corporate collaboration agreements of general interest, whereas advertising is subject to it. The sale of raffle tickets is exempt if it constitutes a taxable event for the raffle tax.

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