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V2609-14 6 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bonificación

99% Corporation Tax relief for traffic and ORA services, but not for municipal underground car parks

A 100% municipally-owned company has requested clarification on whether ORA services, underground car parks, and municipal towing services qualify for Corporation Tax relief and their VAT status. The DGT has ruled that only traffic and ORA services are eligible for the relief, specifically excluding underground car parks.

The question raised

1. Whether the portion of the full Corporate Income Tax quota corresponding to income derived from public street parking services limited and controlled by parking meters (ORA), municipal-owned underground public parking lots, and the removal of vehicles from urban streets by tow truck, their storage, and surveillance, is eligible for a 99% tax credit.

The DGT's ruling

To qualify for the 99% tax credit in Corporate Income Tax, the company must have entirely municipal capital and provide traffic, parking, and mobility services. The management of ORA (regulated parking areas) and the removal of vehicles by municipal tow trucks are eligible for the tax credit, but the management of municipal-owned underground public parking lots is not. Regarding VAT, services provided to the City Council are not subject to the tax as they constitute direct management, whereas services provided to third parties are subject to it.

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