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V1297-14 14 May 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
OTRO · servicio voluntario europeo

Free participation in SVE not considered economic activity

A non-profit association seeks advice on the tax treatment of its participation in the European Voluntary Service (SVE). The DGT states that as the activity is free, it does not constitute economic activity subject to income tax or VAT, and the rental of property for volunteers is exempt from VAT.

The question raised

1) Whether participation in the European Voluntary Service (EVS) means that an economic activity is carried out subject to Corporate Income Tax and VAT.

The DGT's ruling

In Corporate Income Tax, income is exempt if it arises from the corporate purpose and not from an economic activity. In VAT, gratuitous activities do not constitute an entrepreneur status and are not subject to tax. Regarding Non-Resident Income Tax (IRNR), remunerations (in cash or in kind) of non-resident volunteers are taxable in Spain if the work is performed in Spanish territory, and the association must apply the corresponding withholding tax. The student exemption under tax treaties does not apply because the volunteers receive remuneration for their services.

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