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V3159-23 5 December 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Membership fees of non-profit associations exempt from VAT, but individual services are not

A cultural association asks whether its membership fees, rental of premises and ticket sales are VAT-exempt, and whether it can deduct VAT on renovations. The DGT responds that membership fees are exempt, but individual services and rentals to third parties are not, and that the prorata rule must be applied for deductions.

The question raised

Whether the collection of membership fees, the transfer of use of the premises to the City Council, the organization of games, and the collection of entrance fees for events organized by the applicant itself (concerts, plays) would be exempt from Value Added Tax. Deductibility of the Value Added Tax incurred in the execution of the renovation works of the multipurpose room.

The DGT's ruling

Membership fees are exempt from VAT if they are collected to fulfill the corporate purpose and there is no consideration other than that established in the bylaws. Services that satisfy the particular interests of members, as well as transactions with third parties, such as the leasing of premises, are not exempt. The deduction of VAT on renovation works shall be subject to the pro rata rule if the association simultaneously carries out transactions with a right to deduction and without a right to deduction.

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