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Practical Manual for Companies 2020.

Tax system for partially-exempt organisations

Taxpayers who are covered by this special regime for partially exempt entities regulated in Chapter XIV of Title VII of the LIS (you can consult the list of partially exempt entities in section " Obliged to declare " of Chapter 1 of this Practical Manual), must complete the following in boxes [00389] and [00390] "Partially exempt entities regime (Chapter XIV of Title VII LIS)" on page 13 of form 200:

  • In the box [00390] of decreases, you will include the income obtained in the tax period that, by application of the provisions of the aforementioned regulations, are exempt from taxation or that should not be computed for the determination of the taxable base of the tax. Among these incomes, we can mention the following:

    • Those arising from the performance of activities that constitute its object or specific purpose, provided that they are not considered economic activities.

    • Those derived from acquisitions and transfers for profit , provided that both are obtained or carried out in compliance with their specific object or purpose.

    • Those that are revealed in the onerous transfer of assets affected by the realization of the specific object or purpose, when the total proceeds obtained are destined to new investments related to said corporate purpose or specific purpose.

      Keep in mind:

      In none of the three previous cases will the correction for the decrease in the accounting result be made using box [00390] for decreases when it involves returns from economic activities, income derived from assets or income obtained in transfers other than those indicated above.

    New investments must be made within the period between the year prior to the date of delivery or provision of the asset and the three years thereafter and remain in the entity's assets for 7 years, except for its useful life in accordance with the amortization method applied from those admitted in article 12.1 of the LIS.

  • In box [00389] of increases, the non-deductible items will be included for the determination of taxable income. These non-deductible items, in addition to those established by the general regulations of the Corporate Tax, are the following:

    • The expenses attributable exclusively to exempt income . Expenses partially attributable to non-exempt income will be deductible in the percentage that the income obtained in the exercise of non-exempt economic activities represents with respect to the total income of the entity.

    • The amounts that constitute application of results and, in particular, those that are used to support exempt activities.

Income from the teaching activity of a private educational center is not exempt. Income derived from teaching activities is considered to be income from economic operations and, therefore, the exemption does not apply to it.