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V1303-19 6 June 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

VAT exemption denied if foundation director receives market-rate remuneration

A foundation sought clarification on whether its exhibition and workshop organisation activities were VAT exempt. The DGT ruled that it cannot be classified as a social entity because its director-general holds a senior management contract with market-rate remuneration.

The question raised

Exemption of the operations subject to consultation regarding Value Added Tax

The DGT's ruling

For exhibition organization activities to be exempt, the entity must be of a social nature. This requires that management positions be unpaid and that those holding them have no interest in the economic results. If the general manager exercises effective management and receives market-value remuneration, the entity does not meet the requirement of philanthropic management and is not entitled to the exemption.

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