Skip to content
Back to index
V1577-24 26 June 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · cesión global de activos y pasivos

Income from association dissolution via global transfer of assets is exempt from Corporate Tax

A public utility association enquired whether income generated from the global transfer of its assets and liabilities to a foundation upon dissolution is exempt from Corporate Tax. The DGT ruled that the income is exempt provided the association meets the requirements of Law 49/2002 and the foundation is a qualifying entity for patronage tax benefits.

The question raised

Whether the income arising within the association as a consequence of its dissolution through the described global assignment of assets and liabilities is exempt from Corporate Income Tax by application of Article 6.3 of Law 49/2002, regardless of whether the transferred assets are used for exempt activities or not.

The DGT's ruling

Income derived from the dissolution and liquidation of a non-profit entity is exempt from Corporate Income Tax pursuant to Article 6.3 of Law 49/2002. This exemption applies to all assets transferred in bulk through a global assignment of assets and liabilities, regardless of whether the assets were used for exempt activities or not. In order to satisfy the dissolution requirement, the assets must be allocated in their entirety to entities benefiting from patronage, pursuant to Article 3.6 of the aforementioned Law.

Book your free first meeting