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V2458-19 16 September 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad parcialmente exenta

Non-profit associations liable to Corporate Tax if carrying out economic activities

A beekeeping association not of public utility seeks advice on its IS and VAT taxation. The DGT states that its income will be exempt from IS if not derived from economic activity, and services invoiced to members at prices independent of membership fees do not benefit from VAT exemption.

The question raised

1) What would be the taxation of the different types of income obtained by the Association in Corporate Income Tax, Value Added Tax, and the Tax on Economic Activities.

The DGT's ruling

In Corporate Income Tax, the income of a non-profit entity that is not declared to be of public utility is exempt if it arises from its corporate purpose and does not derive from an economic activity. In VAT, services provided to members due to its corporate purpose and without consideration other than statutory fees are exempt. The exact billing of insurance contracted by the association and passed on to its members is exempt from VAT. The sale of lottery is a mixed service: the participation is exempt and the surcharge is subject to the general rate.

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