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V4119-15 21 December 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Sports services provided by a commercial company may be VAT exempt if deemed a social entity

A commercial company offering sports services has queried whether it can be classified as a social entity to qualify for VAT exemption. The DGT ruled that, despite being a limited company, it may be considered non-profit if it does not seek profits for its members and allocates any surpluses to its social purpose.

The question raised

Whether the consulting entity can be considered an organization of a social nature despite being a commercial entity, and whether the exemption under Article 20.One, 13 applies to the activities subject to the consultation.

The DGT's ruling

To apply the exemption under Article 20.One.13, the entity must be a private institution of a social nature that lacks a profit-making purpose, with unpaid officers and no benefits for members. A commercial company may meet this requirement if it does not have the systematic pursuit of profits as its objective and allocates surpluses to the maintenance of its services. The exemption only applies to the provision of services directly related to the practice of sport and not to the delivery of goods or sporting events.

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