Specially protected consumer cooperatives will be taxed at 20% on their cooperative results

The legal nature of consumer cooperatives entails a differentiated tax treatment that depends on their classification and the source of their income. Recently, the Dirección General de Tributos (DGT) has clarified the tax rate applicable to these entities in relation to the results obtained during the fiscal year.

What the DGT has resolved

The inquiry addresses the tax rate that must be applied to the positive pre-tax result of a consumer cooperative. The criteria establish that those entities holding the status of specially protected must apply a tax rate of 20 percent on the tax base corresponding to their cooperative results.

However, the resolution underlines a fundamental distinction in the tax base: while cooperative results enjoy this reduced rate, results of a non-cooperative nature will be subject to the general rate of Corporate Tax (Impuesto sobre Sociedades). This treatment is based on the joint application of Law 20/1990 on tax reforms and Article 29 of the Corporate Tax Law (LIS).

What it means for you

If your entity is a consumer cooperative with the status of specially protected, this criterion confirms legal certainty regarding the segmentation of your profits. The key lies in the correct identification and separation of income:

• Cooperative results: The 20% rate will be applied in accordance with current regulations.
• Non-cooperative results: These must be taxed at the general rate of Corporate Tax.

This distinction implies that accounting and tax management must be rigorous to determine which part of the profit comes from the core cooperative activity and which part derives from activities outside the cooperative's corporate purpose.

What should be done

It is necessary to verify whether the cooperative meets all the legal requirements to maintain its status as specially protected. Likewise, it must be ensured that the accounting allows for a clear segregation between cooperative and non-cooperative results to avoid errors in determining the tax base and the applicable tax rate in the Corporate Tax settlement.