Non-profit associations must apply 21% VAT on the sale of wallets to members

The tax treatment of complementary activities in non-profit entities has been the subject of a recent clarification by the tax administration. The issue focuses on determining whether the sale of wallets to the members of an association can benefit from the exemption provided for membership fees or whether, on the contrary, it must be taxed under Value Added Tax (VAT).

What the DGT has ruled

The Dirección General de Tributos (DGT) has ruled that the supply of goods made for consideration by an association acting as an entrepreneur or professional is subject to the tax. The criterion establishes that the exemption contemplated in Law 37/1992 is only applicable when the consideration received corresponds to the fee set in the bylaws and aims to satisfy the collective interest of the entity.

In the specific case of the sale of wallets, the administration points out that, since a price independent of the membership fee is invoiced to satisfy a particular interest of the member, the operation loses its nature as an exempt fee. Therefore, the transaction is subject to the general VAT rate of 21%.

What it means for you

For non-profit associations, this criterion implies that not all economic benefits they receive from their members are tax-exempt. If the entity carries out commercial activities or sells products that are not part of the statutory fee structure, it must include said VAT in the invoice and declare it to the Tax Agency (Agencia Tributaria).

This scenario forces entities to clearly distinguish between:

• Membership fees: those intended for the maintenance of the association and the collective interest, which remain exempt.
• Sales activities: those that satisfy the individual interests of the members and which, by having an independent price, are subject to the 21% rate.

What should be done

It is necessary for entities to review their bylaws and the way they manage economic benefits to their members. The correct differentiation between the membership fee and the sale of products or services is fundamental to avoid tax contingencies arising from an incorrect application of the exemption. It is recommended to evaluate the billing structure of these activities to ensure compliance with current regulations.