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V2415-22 22 November 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · crowdfunding

Donating net crowdfunding profits to an NGO is not subject to VAT

An unincorporated entity queried whether donating the net profits from a crowdfunding campaign to an NGO is subject to VAT. The DGT ruled that the donation does not constitute consideration for a service, but rather a non-reciprocal grant with no economic interest, meaning there is no taxable transaction.

The question raised

Whether said donation would be subject to Value Added Tax.

The DGT's ruling

Donations do not constitute operations subject to VAT provided they are not the consideration for the supply of goods or the provision of services. In this case, as the amount is voluntary and there is no legal-commercial relationship between the applicant and the NGO, the donation is not the consideration for a specific provision, but rather a mere contribution without economic interest for the entity.

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