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V2534-23 21 September 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidades sin fines lucrativos

Donations made by a foundation are not deductible expenses for Corporate Tax purposes

A foundation sought clarification on whether direct donations made to individuals or institutions to fulfill its foundational purposes qualify as deductible expenses. The Directorate General for Taxes (DGT) ruled that they are not deductible, as such activity does not constitute an exempt economic activity.

The question raised

Given that the referred donations constitute, as established in the statutes, activities carried out in fulfillment of the foundational purposes, the question arises as to whether said amounts should be considered deductible expenses in the Corporate Tax of the consulting entity.

The DGT's ruling

The making of donations to natural persons or institutions does not constitute an exempt economic activity pursuant to Article 7 of Law 49/2002. Therefore, these amounts are not tax-deductible expenses in accordance with Article 8 of Law 49/2002 and Article 15 of the LIS.

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