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V4516-16 19 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · entidades sin ánimo de lucro

Sports association fees may be exempt from Corporation Tax if not deemed an economic activity

A hunting association has enquired whether its membership fees are exempt from Corporation Tax given that it does not carry out economic activities. The DGT has ruled that membership fees are exempt income, provided they arise from the association's social purpose and do not derive from economic exploitation.

The question raised

As a partially exempt entity for Corporate Income Tax purposes, whether it can be understood that the association does not carry out economic activity, meaning its fees would be exempt from this tax.

The DGT's ruling

Income from non-profit entities is exempt if it arises from their specific object or purpose and is not considered economic activity. Membership fees generally constitute exempt income if they do not correspond to a right to a benefit derived from an economic activity. For income not to be considered economic activity, there must be no organization on one's own account of means of production and human resources for the purpose of producing or distributing goods or services.

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