Section 1 of Article 27.3 of Law 49/2002, of 23 December, on the tax regime for non-profit organisations and tax incentives for patronage, sets out the application of this type of deduction in the following terms:
Entities may deduct from the full amount of tax the 15 percent of the expenses that, in compliance with the plans and programmes of activities established by the consortium or by the corresponding administrative body, are made in the propaganda and publicity of multi-year projection that directly serve for the promotion of the respective event.
The amount of this deduction may not exceed 90 percent of the donations made to the consortium, publicly owned entities or entities referred to in Article 2 of Law 49/2002, in charge of carrying out programmes and activities related to the event.If this deduction is applied, such donations will not be eligible for any of the tax benefits provided for in Law 49/2002.
Where the content of the advertising material relates essentially to the publicising of the event, the basis for the deduction shall be the total amount of the expenditure incurred.Otherwise, the basis of deduction shall be 25 per cent of such expenditure.
These deductions will be computed jointly with the deductions established in Chapter IV of Title VI of the LIS with the same limits and conditions established in Article 39 of the aforementioned Law.