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V2796-20 11 September 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidades sin fines lucrativos

Voluntary non-refundable contributions from members are exempt from Corporation Tax subject to certain requirements

A public utility association has enquired whether voluntary contributions from its members intended to increase its social fund are subject to Corporation Tax and whether they generate tax deductions for donors. The Directorate-General for Taxes (DGT) has ruled that such income is exempt if received to support the entity's purposes, and that donors may apply the prescribed tax deductions.

The question raised

Whether the association must be taxed on the contributions received for Corporate Income Tax.

The DGT's ruling

Income derived from gifts and donations received to support the entity's purposes, including contributions in the form of capital endowments, is exempt from Corporate Income Tax. Non-refundable voluntary contributions from members shall be exempt provided that the requirements of Article 3 of Law 49/2002 are met and they are received to support the entity's purposes. Furthermore, these contributions shall entitle members to the deductions provided for in Title III of Law 49/2002 in their personal taxation.

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