Meal delivery with copayment may be exempt from Corporate Income Tax

The nature of activities carried out by non-profit entities has been subject to analysis by the Administration to determine the scope of their tax exemptions. Recently, the applicable treatment for home meal delivery has been clarified when a copayment is involved.

What the DGT has resolved

The Directorate General of Taxes (DGT) has indicated that the meal delivery activity is considered an economic exploitation as long as it involves the organization of production means or human resources. However, the criteria establish that if this activity is carried out in fulfillment of the entity's corporate purpose, it could maintain its exemption from Corporate Income Tax (Impuesto sobre Sociedades).

A key point of the resolution is the validity of the copayment. The Administration determines that the collection of an amount by the beneficiaries does not prevent the activity from being considered part of the specific purpose of the association, provided that the character of assistance to the elderly or to people at risk of social exclusion is maintained.

What it means for you

For entities operating in the field of social assistance, this criterion offers legal certainty regarding the management of their services. The fact that beneficiaries contribute a portion of the cost (copayment) does not automatically turn the activity into a taxable economic exploitation, as long as the ultimate goal is the fulfillment of the organization's statutory purposes.

This implies that the cost structure and the financing method of these delivery services do not void the tax exemption, provided that the activity is integrated into the entity's corporate purpose and does not deviate toward a purely commercial aim.

What should be done

It is necessary to verify that the meal delivery activity is duly included in the entity's statutes and that its execution strictly responds to the social assistance purposes provided for in Law 49/2002. Correct documentation of the activity's purpose and justification that the copayment is a sustainability tool rather than a profit-making aim are fundamental to maintaining the exempt treatment.