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V2535-17 9 October 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad parcialmente exenta

Income from economic activities of a parents' association is subject to Corporation Tax, and certain childcare services are VAT exempt

A parents' association has requested clarification regarding Corporation Tax exemptions and the VAT treatment of its services (dining hall, reception, and after-school activities). The Tax Agency has responded that income from economic activities is subject to Corporation Tax and that, for VAT purposes, childcare and reception services are exempt, whereas dining hall services are not.

The question raised

1) Which income would be exempt and which would not be for the purposes of taxation in Corporate Income Tax.

The DGT's ruling

In Corporate Income Tax, the income of a partially exempt entity is taxable if it derives from an economic activity involving the organization of material or human resources. For VAT, morning/afternoon reception and childcare services during lunch are taxable but exempt, whereas the management of the dining service is taxable and not exempt. Sports services external to the AMPA do not benefit from the educational exemption.

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