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V2938-23 3 November 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actividad económica

Income from animal adoption management is subject to Corporate Income Tax and VAT as it constitutes an economic activity

A non-profit association inquires whether charging amounts for animal adoption (exceeding its costs) prevents the application of the special regime for non-profit entities. The DGT responds that said activity constitutes an economic activity and, therefore, the income and services are subject to Corporate Income Tax and VAT.

The question raised

Question posed In relation to the special regime regulated in Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage, would the fact that they receive from each adopter, in exchange for the dog, amounts significantly higher than the mere costs incurred by the association from the collection to the adoption of the animal, reaching in many cases the market value of the animal, prevent the application of the special regime regulated in said Law? Does mediating and facilitating such adoptions constitute performing a business activity with a profit motive?

The DGT's ruling

The management and mediation in animal adoption involves the organization of material and human resources for the distribution of goods or services, which determines the existence of an economic activity. The income derived from this activity is subject to Corporate Income Tax and is not exempt. Likewise, adoption management services are subject to VAT, as a consideration other than statutory fees is received, meaning the exemption for non-profit entities does not apply.

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