Back to index
V1942-15 19 June 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · establecimiento permanente

Permanent establishment of a foreign public university is not entitled to full Corporation Tax exemption

A US public university has enquired whether its permanent establishment in Spain can apply for full subjective exemption from Corporation Tax based on the principle of non-discrimination. The DGT has ruled that it is not a Corporation Tax taxpayer but rather subject to Non-Resident Income Tax (IRNR), and therefore cannot benefit from the full exemption granted to Spanish public bodies.

The question raised

Question raised 1) Whether the permanent establishment in Spain of a foreign public University may be entitled to the total subjective exemption by virtue of article 9.1.f) of Law 27/2014 of 27 November, on Corporate Income Tax.

The DGT's ruling

The permanent establishment is not a taxpayer of the Corporate Income Tax, but of the Non-Resident Income Tax, therefore it cannot apply the exemptions of article 9.1 of Law 27/2014. The principle of non-discrimination does not oblige the extension of the tax immunities of Spanish public bodies to foreign entities. To access partial exemptions or the regime of Law 49/2002, the establishment must fulfill all the requirements of a non-profit entity and demonstrate that its activities are exclusively for the public benefit.

Apply this to a real case

What is published here, applied to a company or a specific case. The first meeting is free.

Book a meeting Write to the firm
Email
Contact