Income from PTA school canteen or after-school services will be taxed if they constitute economic activities

Parent-Teacher Associations (AMPA) usually operate to facilitate complementary services to school activities. However, the nature of how these services are managed determines their tax treatment before the Tax Administration.

What the DGT has resolved

The Directorate General of Taxes (DGT) has analyzed whether income obtained by an AMPA through the intermediation of canteen services or after-school activities is exempt from Corporate Tax. The criteria are based on the distinction between the entity's social purpose and the performance of economic activities.

The ruling points out that non-profit entities that do not hold public utility status only enjoy partial exemptions. For income to be exempt, it must derive exclusively from their specific social purpose and not constitute an economic activity. If the management of services such as canteens or after-school activities involves the organization of material or human resources on one's own account, the Administration classifies it as an economic activity. In this scenario, both the income obtained and the fees intended to finance said activity will be subject to tax.

What this means for you

If the AMPA acts as a mere intermediary between families and an external company, without organizing the resources itself, the income could maintain its exempt status. However, if the association assumes management responsibility, organizing the personnel or resources necessary to provide the service, the activity loses its exemption.

In the event that an economic activity is determined to exist, the applicable tax rate will be 25% or the progressive scale, depending on whether the turnover requirements established in the Corporate Tax Law (LIS) are met.

What should be done

It is necessary to analyze the operational structure of service management within the association. It must be distinguished whether there is mere intermediation or if there is an organization of own resources that could result in an economic activity. Assessing the nature of the income and its link to the social purpose is fundamental to determining compliance with current Corporate Tax regulations.