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Practical Manual for Companies 2024.

Tax system for non-profit organisations

Effective for tax periods beginning on or after January 1, 2024, Royal Decree-Law 6/2023, of December 19, introduces the following amendments to Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage:

  • Article 3 of Law 49/2002 is amended to specify that will not be considered remuneration of the positions of patron, statutory representative and member of the governing body, the liability insurance hired by the non-profit entity for the benefit of the aforementioned positions, provided that they only cover risks arising from the performance of such positions in the entity.

  • Article 7 of Law 49/2002 is modified to update the relationship of economic activities that, when developed by non-profit entities, may enjoy exemption from Corporate Tax. In this sense:

    • Actions for the social and labor integration of people at risk of social exclusion and economic exploitation of high-capacity education are incorporated.

    • The innovation activity is added to the existing research and development activities, and it is specified that these activities will be exempt from Corporate Tax, provided that they are activities that comply with the definitions included in article 35 of the LIS.

  • Section 1 of article 17 of Law 49/2002 is modified, introducing a new letter f) to incorporate within the section of the donations, gifts and deductible contributions, the transfer of use of a movable or immovable property, for a specific period of time, carried out without compensation. In the same terms, article 18 of said Law is modified to establish the basis of the deduction for the previous concept.

  • Article 20 of Law 49/2002 is modified regarding the deduction of the Corporate Tax rate, in the following terms:

    • It increases the deduction percentage from the deduction base, rising from 35 to 40 percent.

    • The number of exercises is reduced from four to three years during which the donor or contributor must carry out donations to the same entity for an amount equal to or greater than that of the immediately preceding fiscal year, in order to access the 10-point increase in the deduction percentage, percentage that is increased to 50 percent.

    • For the purposes of determine the basis of the deduction, increases by five percentage points, going from 10 to 15 percent, he limit that operates on the taxable base of the period.