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Practical manual for Income Tax 2023.

3.1. General regulation and limits

Regulations: Art. 27 Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage ( BOE of the 24th)

Delimitation of events of exceptional interest

Article 27.1 of Law 49/2002 defines the support programs for events of exceptional public interest as " the set of specific tax incentives applicable to the actions carried out to ensure the proper development of the events that, where appropriate, are determined by Law."

Percentage and deduction base

For its part, article 27.3 of Law 49/2002 establishes as a tax benefit for taxpayers of IRPF who carry out economic activities under the direct estimate regime the possibility of deducting from the full tax rate 15% of the expenses that , in compliance with the plans and programs of activities established by the consortium or by the corresponding administrative body, they carry out in multi-year projection propaganda and publicity that directly serve to promote the respective event.

For these purposes, expenses for advertising and publicity with a multi-year projection are considered to meet the requirements indicated when they meet the conditions referred to in section 1 of article 8 of Royal Decree 1270/2003, of October 10, which approves the Regulation for the application of the tax regime for non-profit entities and tax incentives for patronage.

Note:  For these purposes, please note:

  • The Resolution of January 25, 2018, of the General Directorate of Taxes, which approves the Manual of application of the tax benefits corresponding to the expenses of propaganda and advertising of multi-year projection, which serve to promote events of exceptional public interest ( BOE of February 2) contains the applicable rules and,

  • Resolution of June 9, 2022, of the General Directorate of Taxes, which interprets the criteria of the Manual for the application of the tax benefits provided for in the first section of article 27.3 of Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage, corresponding to advertising and publicity expenses of multi-year projection, which serve to promote events of exceptional public interest, approved by the Resolution of January 25, 2018 ( BOE of June 11).

When the content of the advertising medium essentially refers to the dissemination of the event, the basis for the deduction will be the total amount of the expense incurred . Otherwise , the deduction base will be 25 percent of said expense .

Limits

  1. Joint limit on deductions to encourage the performance of certain activities

    This deduction will be computed jointly with the deductions regulated in articles 35, 36, 38 and 38 ter of the LIS , for the purposes of the limits established in article 39.1 of the LIS . 

    These limits for the set of deductions provided for in article 39.1 of the LIS apply in the IRPF on the quota that results from reducing the sum of the full, state and autonomous quotas (boxes [0545] and [0546] of the declaration), in the total amount of the deductions for investment in habitual housing (in the case of taxpayers to whom the transitional regime of this deduction is applicable), for investment in new or recently created companies, provided for in article 68.1 of the Law of IRPF , and for actions for the protection and dissemination of the Spanish Historical Heritage and the World Heritage (∑ boxes [0547] and [0548]; [0549]; [0550] and [0551 ]).

    In relation to these limits, article 39.1 of the LIS establishes that the amount of the deductions (excluding the deduction for expenses related to the execution of a foreign production of feature films or audiovisual works referred to in article 36.2 of the LIS which is not subject to these limits), applied in the tax period, may not jointly exceed 25% of the previously defined quota .

    However, said limit is raised to 50% when the amount of the deductions provided for in articles 35 and 36 of the LIS (the latter since January 1, 2021), which corresponds to expenses and investments made in the tax period itself, exceeds 10% of the total tax quota , reduced by the deductions for the protection and dissemination of Spanish Historical Heritage and World Heritage and for investments in habitual housing and in new or recently created companies.

    Where there are outstanding balances of deductions from previous years, the applicable limit (25% or 50%) will be applied jointly to the deductions for the 2023 financial year and to the outstanding balances from previous years.

  2. Additional limit

    As regards the limits of the deduction, in addition to the general one referred to in the previous section, the amount of this deduction is subject to another additional one which consists in that cannot exceed 90% of the donations made to the consortium, publicly owned entities or entities referred to in article 2 of Law 49/2002, of December 23, in charge of carrying out programs and activities related to the event throughout the duration of the program.

    If the deduction examined in this section is applied for expenses linked to events of exceptional public interest, the donations referred to in the previous paragraph will not be eligible for any of the tax incentives provided for in the aforementioned Law 49/2002.