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V3400-15 5 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gasto deducible

Donations to non-profit entities are not deductible expenses in Corporate Income Tax

A company inquires whether mandatory donations to non-profit entities, derived from its income, are deductible expenses. The DGT responds that they are not deductible as they are considered donations or gratuities, although it mentions the possibility of tax credits for patronage if the requirements of Law 49/2002 are met.

The question raised

Question raised 1) Whether the amounts donated by the company to the non-profit entities accredited under the aforementioned conditions can be considered in their entirety as a deductible expense in the Tax and should not be considered gratuities.

The DGT's ruling

Amounts donated to non-profit entities are not tax-deductible as they constitute donations or gratuities, pursuant to Article 15.1.e) of the LIS. However, if the entities are subject to the regime of Law 49/2002, the taxpayer may be entitled to apply tax credits to the gross tax liability for such irrevocable, pure, and simple contributions.

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