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V2893-17 13 November 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidad parcialmente exenta

Non-profit association income subject to Corporation Tax if derived from economic activity

A non-profit association has enquired whether income from activities such as excursions and dances, as well as membership fees, is tax-exempt. The DGT has ruled that if these activities constitute an economic activity, the resulting income and the fees intended to finance them will be subject to Corporation Tax.

The question raised

1) Whether the income obtained and the fees paid by the members are considered exempt.

The DGT's ruling

Income from partially exempt entities is exempt if it arises from their corporate purpose and does not derive from economic exploitation. If the activity involves the organization of production means or human resources to distribute goods or services, the income shall be subject to tax, even if carried out with the members themselves. Likewise, fees that finance said economic activity shall not enjoy the exemption.

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